Dawn Business
The world appears to be rediscovering Pakistan as it plays a mediating role in easing regional tensions and helping avert global recession. Disruptions to key sea routes and rising risks at established regional shipping hubs have begun to divert attention and some traffic towards the country’s underutilised ports. Fiscal incentives announced in March have further supported a modest uptick in activity at local ports. According to port operators and private sector sources tracking recent trends, tariff cuts of up to 60 per cent and the introduction of volume-linked rebates have incentivised shipping lines, boosting throughput at Pakistani ports by stimulating trade flows and improving the maritime sector. While hard data is not yet available, anecdotal evidence points to a noticeable increase in vessel calls, with a rising number of ships at anchorage and growing demand for ancillary services such as bunkering. The government announced a comprehensive package of fiscal incentives, effective March 18, 2026, to enhance the regional competitiveness of its ports. Measures include tariff and cargo discounts, notably up to a 60pc reduction in port tariffs for vessels carrying at least 50pc transhipment cargo, and a 50pc discount on wet cargo charges for large container ships at Karachi and Port Qasim. ‘To fully leverage Pakistan’s coastline, we need deeper drafts, expanded berthing and storage capacity, and sustainable use of marine resources, alongside greater digital integration’ The minimum transhipment threshold has been lowered to 7.5pc, while the base discount has been raised to 20pc, with additional tiered incentives. Further measures include a 5pc discount for green shipping, a 60pc concession on dry bulk exports, a 50pc reduction in transhipment charges at Port Qasim, and approval of a new ferry service connecting Pakistan with Iran and Gulf Cooperation Council (GCC) countries. Experts believe that timely measures, meaningful reforms and enhanced port capacity could finally allow Pakistan to harness the natural advantage of its geography. This is not the first time Pakistan has abruptly come into global focus. Following the Soviet invasion of Afghanistan in 1979 and again after 9/11 in 2001, the country swiftly moved into the West’s strategic orbit. In both instances, inflows of dollars fueled short-term growth spurts, but these proved unsustainable amid weak policies and fragile political and economic structures. This time may be different. The goodwill appears to stem from Pakistan’s own diplomatic positioning rather than from external shocks, and the country is not under direct military rule as it was in earlier phases. Still, outcomes will hinge on the leadership’s ability to convert this moment into durable gains. “From being labelled as a dangerous, near-failing state, Pakistan has, for now, earned recognition as a responsible nation committed to peace. It has also, at least temporarily, addressed a long-standing concern of the private sector, which viewed the country’s image as a key deterrent to investment,” an analyst said, requesting anonymity. “With sustained effort and reform, undertaken in close consultation with the private sector, Pakistan could shift towards a more durable growth trajectory,” he added. Retired Rear Admiral Moazzam Ilyas, Chairman of Port Qasim Authority (PQA), said the fiscal incentives announced by the government have already led to an increase in vessel calls and transhipment activity, with both Port Qasim and Karachi Port recording higher throughput. “To fully leverage Pakistan’s coastline, we need deeper drafts, expanded berthing and storage capacity, and sustainable use of marine resources, alongside greater digital integration. Under the leadership of Minister for Maritime Affairs Junaid Anwar Chaudhry, port authorities have also facilitated transhipment cargo on GCC-bound routes,” he noted. He added that while Pakistani ports have demonstrated resilience during recent Gulf disruptions, handling sustained surges will require further infrastructure upgrades. “The influence of competing hubs and shipping lines’ preference for established transhipment routes in South Asia has constrained Pakistan’s potential so far. That said, improvements in bunkering, digitisation and fiscal incentives are gradually positioning our ports for a stronger regional role,” he added. M H Lodhi, Managing Director of Monsoon Winds Maritime Services, echoed the PQA chairman’s view that the March incentive package has already delivered measurable gains. He noted that Karachi Port recorded a sharp surge in transhipment volumes in March, handling about 11,000 twenty-foot equivalent units (TEUs), far exceeding the 8,300 TEUs handled in all of 2025. Global lines, such as Hapag-Lloyd and OOCL, have added or planned calls, indicating early traction. Port Qasim has also seen steady growth, supported by available capacity of over 8,000 TEUs and additional yard space. However, Mr Lodhi cautioned that much of the spike reflects temporary diversion due to Gulf disruptions rather than structural demand. Sustained volumes would strain the existing systems because of limited yard space, infrastructure gaps, congestion risks, high turnaround times and a lack of off-dock integration. He termed the moment a strategic opportunity to convert short-term gains into durable growth by addressing bottlenecks, to compete with established hubs like Dubai and Salalah. “The incentives worked tactically, but becoming a regional hub requires deeper structural and policy reforms,” he concluded. Muhammad Rajper, Managing Director of General Shipping Agencies, said that while firm data is unavailable, each additional vessel brings in roughly $50,000 to $75,000 in port dues. “Unconfirmed reports suggest around 10 vessels called at Pakistan’s three ports recently,” he noted. He stressed the need to actively market Pakistani ports to international shipping lines. “Capacity is not the constraint. The issue has been rigid custom procedures, though these are now easing, and the heavy subsidies offered by Gulf ports, which have made competition difficult,” he added. Published in Dawn, The Business and Finance Weekly, April 20th, 2026
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