July 28 - Aug 03, 2008

Commerce Minister, Ahmed Mukhtar announced the Trade Policy 2008-09 with an export target of $22.10 billion envisaging a growth of 15 percent. The policy did not mention import target because of the rising international oil and food prices. It aims to diversify its exports and vigorously engage in re-negotiation on the list of SAFTA and the Regional Agreement on Trade in Services among the SAARC countries. It has also taken various positive steps to improve competitiveness, quality of products and to develop small and medium sized sector to enhance its share in total exports.


Trade policy opens larger avenues of import from India. After successful implementation of the policy it is most likely that India will become the second largest trade partner of Pakistan after China. The policy does not give India MFN status because of its refusal of removing non-tariff barriers. It facilitates 136 new items from India, 72 tariff lines were added to the importable list of raw materials, chemicals and industrial output, nine tariff lines for pharmaceutical products and vaccines, two for fruit and vegetables, 19 for fertilizers, 32 for machinery and parts. Pakistan has officially diverted its global trade worth $ 4.132 billion toward India following inclusion of 438 new importable items in the positive list during the last 10 months. Pakistan's tradable list with India had 591 items in 1997, but it has been enhanced to 1938 items in 2008.

It allows import of CNG buses from India with a commitment to manufacture such buses in Pakistan. It allows import of diesel and fuel from India. To boost export the policy extended the scope of Duty and Tax Remission for Export (DTRE) scheme for allowing import of raw materials and input goods from India without payment of custom duty, excise duty, sales tax and withholding tax.

Good quality stone for further processing the manufacturing/ equipment for mining/ quarrying and grinding of materials will be allowed from India. To give access to our students particularly, it allowed import of academic, scientific books from India. Rice farm machinery namely paddy harvesters and dry will be imported from India through Wagha by road.


For boosting exports Trade Policy offers attractive incentives for traditional products. It proposes establishment of 11 new industrial clusters in different cities. It decided to reactivate Federal Export Promotion Board for significant increase in exports. In order to make it more responsive to the exporters needs it decided to review the working of TDAP. Further, to facilitate northern areas exporters it decided to establish TDAP office there.

To increase exports and boost investment import of gold, silver platinum, palladium, diamond and precious stones have been exempted from custom duties and sales tax.

It was decided to establish a Halal Certification Board to devise and enforce Halal Standards and Certification mechanism for export of Halal products. It proposes the establishment of bio-equivalence laboratories in the National Institute of Health.

In order to develop handicraft sector and make it a viable industry it has been decided that consultants of international repute would be engaged to suggest improvement in the development of handicraft.

It allowed import of used vehicles of different brand of industries, public delivery organization and used machinery to reduce the cost of doing business. Further, it allowed re-export of vehicles imported by overseas Pakistanis.

Ministry of Food and Agriculture will give attention to evolving new varieties of rice and increasing the area for the cultivation of rice.

It was decided that the horticulture export would be declared as industry to qualify it for industrial credit, relief in taxation, etc.


Trade Policy facilitates cheap and easy availability of raw material as well as capital goods from India. In this difficult period it has made a firm determination to encourage exporters and producers to come up to the expectation of the people of Pakistan. Unfortunately, the policy has met with mixed reaction from industrialist and businessman. In the textile sector it had failed to attract incentives to investors. It did not mention research and development for export industry in general and textile sector specifically. Very little has been talked about diversification, development or exploration of new markets for boosting exports. Traders involved in the export of Marble have expressed satisfaction on the Trade Policy. Petroleum dealers have appreciated the decision to invite CNG manufacturer to establish their unit. Trade Policy should give impetus to textile sector because of its 57 per cent contribution in total export revenue.