The textile sector in Pakistan says the budget offers no significant relief. Reduction in export refinance rate to 4.5 per cent and bringing long-term financing to six per cent are some of the incentives the government has announced for the manufacturing sector.

In the last budget, the government had reduced mark-up rate on export finance from 9.4 per cent to 7.5 per cent. This rate was then brought down to six per cent in February 2015 and has now come down to 4.5 per cent. Similarly the government reduced the mark-up rate on long-term financing facility, between three to 10 years, from 11.4 per cent to nine per cent to allow export-oriented industries to make investments on a competitive basis. This was then reduced to 7.5 per cent in February and has now been brought down to six per cent.

In the first 10 months of fiscal year 2015, overall textile exports were down 1.2 per cent compared to the same period of the previous year. This comes despite Pakistan’s securing the GSP Plus facility that grants it duty-free access to markets in the European Union. The euro lost about 20 per cent of its value against the Pakistani rupee in the last one year.