Government of Pakistan announced trade policy for fiscal 2008-09 on July 18 setting an aspiring export target of US $22.10 billion. However, the center refrained from projecting the import targets due to the ever increasing prices of oil and food world-wide.
The trade policy that offers a number of incentives for traditional products was announced at a press conference by Commerce Minister Ahmad Mukhtar. Establishment of 11 new industrial clusters, reactivation of Federal Export Promotion Board and review of ordinance issue by Trade and Development Authority of Pakistan were also declared at the conference as part of the policy.
Although a package of subsidies has been readied for the textile sector, it has yet not been announced by the Government. Import of more than 136 new items from India has been permitted and of these 72 tariff lines were added to the importable list for raw materials, chemicals and industrial inputs including 32 for machinery and parts.
After including these items, the aggregate list of tradable products with India has increased from 1,837 to 1,938 tariff lines. The global import of these 136 tariff lines stood at $2.8 billion of which $2.2 billion was spent only on import of POL and diesel alone.
This means that the Government is granting permit to make imports of an additional $2.8 billion from India which will increase India's exports to the country to over $3 billion from the present level of $1 billion becoming the second largest trading partner of Pakistan after China.
The duty drawback rate has also been increased by one percent of the FOB value for 14 traditional products, including tents, canvas, carpets, rugs and mats, sports goods, footwear, furniture, handicrafts, and jewelry among others.
Besides, import of gold, silver, platinum, palladium, diamond and precious stones have been exempted from custom duties and sales tax to increase exports and encourage investments in the sector. Additionally, import of equipments for mining, and grinding of minerals from India was also allowed to improve the availability of good quality stones for further processing.
The Government has also decided to increase the amount of subsidy given to exporters to comply with environmental standards to eight percent or 50 percent of the mark-up, whichever is lower. Furthermore, import of cotton yarn by truck from India through Wagah border has also been allowed.
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