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Finance Ministry for availability of affordable finance for export sector

Finance Ministry for availability of affordable finance for export sector

ISLAMABAD: The current export finance rate 3.5 percent is the lowest in a decade and it had been lowered to ensure the availability of affordable finance for the export sector. As result, the position of availability of affordable finance for the export sector has improved significantly.

Sources at the Finance Ministry told Customs Today on Monday that the State Bank of Pakistan (SBP) also reduced the discount rate to 6 percent in a bid to improve the availability of finance for the export sector.

The source said that government had taken a number of steps to increase the exports of the country, including the concessionary financing, duty free import of raw material under temporary importation scheme/Duty Tax Remission on Exports (DTRE), concessions in duty/taxes on import of machinery and raw material of priority export sectors.

“The initiatives inter-alia included, concessionary financing, subsidy on cost of plant and machinery, establishment of EXIM Bank, Services Trade Development Council, Trade in Services Wing, Trade Dispute Resolution Organization, Pakistan Land Port Authority and Leather Export Promotion Council” the source observed.

The government is trying to get better market access for the local businesses in international markets by concluding Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) with different countries through active trade diplomacy, the source added

In this regard, the source said that bilateral free trade agreements with China, Sri Lanka, Malaysia, and PTA with Iran, Mauritius and Indonesia were already in place. The opportunity of zero-rated market access in European Union market under GSP Plus scheme has provided a fillip to our exports to our largest market.

Resultantly, the source said that there had been a rise of 21 percent was witnessed in Pakistan’s exports to European Union in 2014, which translated into an additional export of $1.3 billion. Moreover, government is in the process of negotiating trade agreements with Thailand and Turkey.

In order to fulfill long awaited demand for reducing cost of doing business, government also reduced electricity tariff by Rs 3 for the industrial units with effect from fist day of the current year 2016.