Before its announcement the federal cabinet, which met here under the chairmanship of Prime Minister Chaudhry Shujaat Hussain, approved new trade policy.
The commerce minister said a quantum leap would be to increase exports to between $25 billion and $30 billion in five years and this could be achieved through enhancing market share of textile exports, diversification and improvement of quality of its goods.
Humayun Akhtar said that major incentives were being offered to traders to achieve targets and other long-term objectives. He mentioned, in particular, elimination of sales tax on ginned cotton to reduce costs for the spinning sector, setting up of garments cities and removal of ban on import of cotton waste to help towel manufacturers.
The garment sector would be provided technical, commercial and marketing support at the cost of Export Promotion Bureau to improve its productivity and product range.
The minister said that almost all restrictions on relocation of used textile machinery and related equipment have been removed to encourage aggressive establishment of enhanced textile production capacity.
He said that for Pakistan to achieve the desirable rates of growth, the government must follow appropriate and consistent economic policies.
The minister noted that due to correct direction and consistency of policy, Pakistan's economic indicators, including export figures, are the best they have ever been.
Supplier credit fund has been set-up to facilitate the exporters. Concessional credit scheme has also been announced. The policy addresses the WTO issue in depth. The stakeholders have been ensured that the government was fully alive to the implications of WTO regime and taking all possible steps to deal with the subject effectively to protect national interest. Special package for garment sector has been announced.
A Communication City would be established in Islamabad to provide all infrastructure facilities to information technology (IT), telecommunication and media companies to promote export of information technology products.
Special allocations have been made from export development fund for potential areas. All previous schemes have been carried forward for 2004-05 to ensure continuity in economic reforms and policies.
Agencies add: Textiles and garment exports during the last financial year were $8.302 billion, accounting for 68 percent of the total exports.
The commerce minister said he was confident Pakistan was ready for Jan. 1, 2005 when all remaining quotas on textile exports will be phased out.
"The elimination of textile quotas has been a longstanding objective for us because we enjoy a comparative advantage in this sector...our assessment is that in overall terms Pakistan stands to gain from the abolition of textile quotas," Humayun Akhtar said.
He said: "The government's envisaged role is of a catalyst; to spur businessmen and exporters to achieve more and more."
The policy envisages special initiatives for the export of non-traditional items like gems and jewellery, fish and agricultural products and promotion of "Made in Pakistan" products.
The federal government in collaboration with the provincial and district governments and private sector would provide assistance for rehabilitation of the infrastructure of existing industrial estates.
For this purpose, the government would contribute up to 50 percent of the cost.
The private sector would be encouraged to invest in green houses and cool chain infrastructure to increase export of value-added horticultural products.
They would be provided facility of concessional financing and the first 6 percent of the mark-up rate would be picked up by the Export Development Fund.
Pakistan Standards for Horticulture products to be developed to increase export of horticulture products.
Fifty- percent subsidy is being restored for registration of pharmaceutical products in foreign countries.
The policy also provides incentives for priority export sectors, including leisure equipment, fisheries, shrimp farming, furniture, gems and jewellery, footwear and medical equipment.
To encourage export of finished products of granite and marble as well as furniture from far-flung areas, inland export subsidy of 25 percent of freight would be allowed.
A Suppliers Credit Fund of $10 million each is being set up to facilitate development of markets in Africa and Central Asian Republics for exports.
The commerce minister said the sales tax regime for textile products is under review. However, as a first step, ginned cotton had already been exempted.
The existing freight subsidy scheme has been extended for another year.
In order to facilitate re-export of imported goods, the condition of value-addition has been waived.
The government would provide 100 percent cost of consultancy services to private parties for development of accredited testing facilities of international standards within the country.
A country-specific programme beginning with Japan would be launched to identify the causes of decline in export and suggest remedies.
Other measures announced in the Trade Policy include increase in the cost of samples for export to $25,000 and increase in the limit of gift parcel scheme to $5,000.
Humayun said that the new improved duty drawback rates would be announced in a few days for the man-made fibre sector.
Turning to import strategy, he said, relocation of industrial projects from abroad has been allowed in all manufacturing and industrial sectors. Taxes and tariffs have been reduced on agro-industrial sector-related machinery and raw materials.
Under gift and transfer of residence scheme, import of tractors, bulldozers, laser land levellers and combined harvesters is being allowed. Import of motorcycles in CKD kits has also been allowed to recognised assemblers.
The minister said that the units in export processing zones would export up to 20 percent of their production to various areas in Pakistan and 80 percent to foreign countries.
Import of animal fur is being allowed to facilitate leather garment industry. Ban on import of cotton waste has been lifted.
Import of used hand plant, machinery and equipment excluding passenger transport vehicles, trucks would be allowed to the construction, mining, oil and gas and petroleum sectors.
Humayun announced lifting of ban on the import of industrial dry cleaning machines, vending machines for postage stamps, food and beverages and money changing machines and several scientific equipment. Ban has also been lifted on used mobile trolleys meant for textile industry. Import of scrap of stainless steel waste for re-melting has also been allowed.
The commerce minister said to provide a more enabling environment, the government would adopt a positive, supportive and problem solving attitude. The SME sector would be developed to serve as vendors to export industry and as exporters themselves.