trade policy of Pakistan has been liberalised and
the foreign exchange control system has been
dismantled. Most of the products have been removed
from the negative and restricted lists and various
facilities have been provided to the exporters
including a better system of duty drawbacks,
bonded warehousing, establishment of export
processing zones and introduction of export
processing unit schemes.
Export Promotion Bureau has been established on a
new pattern to help the exporters in an effective
way. Resident and non-resident Pakistanis have
been allowed to hold foreign exchange in the
external accounts. Foreign Currency Bearer
Certificates have been introduced. These
certificates carry a rate of interest one quarter
per cent higher than LIBOR.
government has largely de-regulated, de-controlled
and simplified the import procedures. Now import
of all free importable items (only 80 categories
are banned for import of religious, national
security, health, and safety considerations) have
been allowed, without going through any
bureaucratic procedure. Moreover it is allowed to
open Letters of Credits, with authorised foreign
exchange dealers/banks without prior government
a view to encouraging exports, Pakistan provides
duty-free status to the exporters, export
financing and rebates in income tax on export
earnings. Duty-free status is ensured to the
exporters through four schemes, viz., Standardized
Rebates, Bonded Warehousing, Export Processing
Zones, and Export Processing Units. In order to
ensure adequate supply of credit to small and
medium exporters, a scheme of Export Credit
Guarantee has been introduced. The capital base of
the scheme has been increased from Rs. 60 million
to Rs. 130 million which will be sufficient to
extend insurance cover to loans amounting to Rs.
2.6 billion. The scheme will function on the basis
of one window operation and the exporters will be
provided both the insurance cover and loan at the
designated bank branches.
provides credit to exporters at 6 per cent for a
period of 180 days. The concessionary export
financing is extended to almost all the exports.
However, the period of concessionary export
financing for export of engineering goods has been
fixed at 365 days.