By Farooq Awan

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed a five-year tax holiday for new medical device manufacturing and export units in the federal budget FY2026-27, saying that greater fiscal incentives can help reduce import dependence and support the development of domestic manufacturing capacity.

According to the FPCCI budget proposals document available with Wealth Pakistan, Pakistan currently imports healthcare devices worth around $500 million annually, creating pressure on the country’s foreign exchange resources and increasing dependence on external suppliers.

The chamber stated that the proposed tax holiday is aimed at encouraging investment in local manufacturing and creating conditions for the growth of a domestic healthcare devices industry.

According to the document, stronger support for the sector can contribute to import substitution and generate industrial activity within the country.

FPCCI maintained that medical device manufacturing represents an area with significant growth potential because of increasing healthcare requirements and rising demand for medical equipment.

The organization noted that the development of local production facilities can help reduce reliance on imported products while creating opportunities for investment and employment generation.

According to the proposals, expanding domestic manufacturing capacity can also strengthen supply chains and improve the availability of healthcare-related products in the local market.

The chamber further proposed allowing 100% depreciation in the first year on plant and machinery used in healthcare device manufacturing.

According to FPCCI, the industry requires large capital investments and depends on specialized machinery that can become technologically outdated within relatively shorter periods.

The organization stated that accelerated depreciation could reduce investment costs and encourage businesses to adopt modern manufacturing systems.

The document noted that investment in advanced equipment may help improve production efficiency and support the development of higher-value manufacturing activities.

FPCCI also emphasized the importance of encouraging industrial diversification through targeted incentives for emerging sectors.

The chamber maintained that industries focused on technology and specialized manufacturing can contribute to economic growth through increased value addition and the development of local capabilities.

According to the proposals, stronger domestic production can help reduce pressure on foreign exchange reserves while improving industrial output and creating new employment opportunities.

FPCCI stated that policy measures designed to support healthcare manufacturing can strengthen the broader industrial base and support long-term economic development objectives.

Credit: INP-WealthPk