The Commerce Ministry of Pakistan has been compelled to withdraw its Textile and Apparel Policy 2020-25 due to the finance ministry’s harsh conditions on new fiscal incentives. The policy has already been approved by the ECC and ratified by the Cabinet, according to the Business Recorder.

The Finance Ministry had said, the government is consistently supporting the export sector. During last three years, an estimated Rs 115.5 billion were disbursed to zero-rated sectors under DLTL schemes to textile exporters and over Rs 100 billion were given as power and gas subsidy. Further concessions included taxes and duty-free import of raw material and machinery, and market determined exchange rate and subsidized financing by the State Bank of Pakistan (SBP) were provided.

However, exports of five zero-rated sectors registered negative growth in 2019-20 vis-à-vis 2018-19 and annual cumulative growth rate remained 6 per cent in the last three years. Finance Division argues it is imperative for the Commerce Ministry to take a holistic picture of the unprecedented support and outcome thereof for informed decision making by the ECC/Cabinet.