Govt to spend Rs20bln on export sector development

ISLAMABAD: The government will spend Rs20 billion on the development of export sector over the next three years under the strategic trade policy framework and to counter effects of global recession, sources said on Monday. 

The sources at the commerce division said weak import demand in the world, low international commodity prices, slowdown of Chinese economy and Eurozone debt crisis were the major reasons behind declining exports.

The government announced incentive for technology up-gradation in shape of investment support of 20 percent and mark-up support of 50 percent up to a maximum of one million rupees per annum per company for import of new plant and machinery. 

The other initiatives include matching grant of up to a maximum of five million rupees for specified plant and machinery or specified items to improve product design and encourage innovation in small and medium enterprise (SME) and export sectors of leather, pharmaceutical and fisheries. Matching grant will also facilitate branding certification for faster growth of SME and export sector in Pakistan’s economy through intellectual property registration (including trade and service marks), certification and accreditation.

Drawback for local taxes and levies of four percent are given to exporters on freight on board values if exports increase 10 percent and beyond. Under short-term export enhancement measures, the four product categories – basmati rice, horticulture, meat and meat products and jewellery – are being focused for Iran, Afghanistan, China and European Union.

Uninterrupted energy supply has been implemented with zero electricity load-shedding on industrial feeders since October 2015 and zero gas load-shedding for industry since March 2016. In order to reduce cost of doing business, the government reduced electricity tariff by three rupees for an industrial unit with effect from January 1, 2016. Furthermore, the fuel adjustment has been passed on to consumer to further reduce cost of production.

The export infrastructure is being continuously improved. National Tariff Commission Act has been revamped and approved by the parliament while Trade Development Authority of Pakistan is undertaking various export promotional activities through trade exhibitions and delegations.