OVERVIEW of

PAKISTAN’S
IMPORTS &
EXPORTS
GROUP MEMBERS
Salma Bashir 126
Sana Khalid 127
Nasiba Waris 139
Sobia Akhlaq 1548
Sameera Dar 1542
Kiran Zahra 1550
Composition of Imports and Exports
of Pakistan

Samira Dar
1542
 Facts and Figures
For the last 5 years it has averaged 6-7% growth.
Pakistan had the narrow export base but due to govt. efforts
it has been increased in the last five years.
During the last five years, inflation has increased to a great
extent. Currently the inflation rate is 25%.
Pakistan earns a major portion of foreign exchange from the
export of its products such as cotton products, scientific,
medical & hospital equipment, Toys, bicycles and other
sporting goods, etc.
Civilian aircraft, Computer accessories,
Telecommunications equipment, Tanks, artillery, missiles,
rockets, guns & ammunition, etc are the major imports.
 Types of industries
Agriculture
Automobile Industry
Cement Industry
IT Industry
Cotton &Textile Industry
Electronics
Aviation
Livestock
Machinery
Pharmaceutical Products
Public administration and defense
Food Items
Sports Goods
Miscellaneous
 Major Exports of Pakistan

Over 80% of Pakistani exports are cotton products.

• Cotton apparel & household furnishings
US$2.6 billion (70.6% of Pakistani to U.S. exports, up
18.6% from 2005)
• Cotton cloth & fabrics (threads, cordage)
$351 million (9.6%, down 5.6%)
• Other textiles apparel & household furnishings
$138.3 million (3.8%, down 11.6%)
• Textile floor coverings including rugs
$122.1 million (3.3%, down 2.1%)
• Non-textile apparel & household furnishings
$81.4 million (2.2%, up 7.2%)
 Sporting & camping apparel, footwear & gear
$61.2 million (1.7%, up 4.7%)
Other scientific, medical & hospital equipment
$37.9 million (1%, up 10.4%)
Toys, bicycles and other sporting goods
$34.4 million (0.9%, up 16.5%)
Synthetic cloth & fabrics (threads, cordage)
$23.7 million (0.6%, down 39.1%)
Cookware, cutlery, house & garden wares
including tools
$21.4 million (0.6%, up 10.2%)
 Major Imports of Pakistan
Civilian aircraft (complete)
US$753.1 million (37.9% of Pakistani to U.S. exports,
up 1,739% from 2005)
Generators & accessories
$132.3 million (6.6%, up 135.7%)
Computer accessories
$308.4 million (4.5%, up 7.2%)
Chemical fertilizers
$87.3 million (4.4%, down 51.6%)
Engines & turbines for military aircraft
$40.9 million (2.1%, up 2,186.4%).
Civil aircraft (parts)
$53.2 million (2.7%, up 5.5%)
Military parts
$43 million (2.2%, up 27.3%)
Telecommunications equipment

$64.1 million (3.2%, down 24.6%)

Tanks, artillery, missiles, rockets, guns & ammunition
$61.7 million (3.1%, up 150,368%)
 Fastest-Growing Pakistani Exports

Industrial organic chemicals

US$13.6 million (up 339,100% from 2005)
Bakery & confectionary products
$5.3 million (up 197%)
Miscellaneous items (e.g. tobacco, waxes, non-food oils)
$18.8 million (up 119%)
Other automotive parts & accessories
$2.8 million (up 115%)
Fruits & preparations (e.g. frozen juices)
$4.4 million (up 104%).
 Fastest-Growing Pakistani Imports
Tanks, artillery, missiles, rockets, guns &
ammunition
US $61.7 million (up 150,368% from 2005)
Engines & turbines for military aircraft
$40.9 million (up 2,186.4%)
Civilian aircraft (complete)
$753.1 million (up 1,739%)
Sports apparel & gear
$3.4 million (up 917%)
SUBSTITUTE FOR IMPORT
& EXPORT

Sana Khalid - 127

Substitutes for Imports and Exports in Pakistan
Substitutes for Imports
 Ethanol a viable substitute for oil in motor vehicles

 World food prices have risen sharply in recent months

 Trend is likely to continue as more and more agricultural land is converted
from the growing of food crops to crops like sugar cane and maize
 It can be turned into ethanol – for use as a substitute for petrol in
automobiles
 This change is being driven by high oil prices, which have made ethanol a
cheaper substitute
 The surging import bill on oil can be reduced through the promotion of this
new initiative as substitute for motor vehicles oil
 It can save the foreign exchange of estimated 500 million dollars
 Coal as Substitute for Gas

 There is an acute gas shortage all over the country besides power
 We have to use our coal reserves to convert into natural gas
 To overcome the shortage instead of importing gas at very high
rates.
 Coal gasification and coal-to-liquid are some proven technologies
 Which can be successfully employed in Pakistan to reduce
dependence on imported oil and natural gas.

 Coal gasification offers one of the most versatile and cleanest ways
 Convert the energy content of coal into electricity, hydrogen, and
other energy forms.
 Biodiesel commercialization in Pakistan
 The majority of the worlds energy needs are supplied through petrochemical
sources, coal and natural gas.

 All of these sources are finite and at certain usage rate will be consumed by
the end of the next century.

 The depletion of the world petroleum reserves and increased environmental

concerns has stimulated recent interest in alternative sources for petroleum
based fuels.

 Biodiesel defined as “a substitute for, or an additive to Diesel fuel that is

derived from the oils and fats of plants and animals”

 Monoalkyl esters of long chain fatty acids derived from a renewable lipid
feedstock,

 Such as vegetable oil or animal fat, is becoming popular in developing

countries as well as developed ones.
 Compressed Natural Gas (CNG) as Inter Fuel Substitution
 Hydrocarbon Development Institute of Pakistan
(HDIP) has pioneered the use
of environment friendly Compressed Natural
Gas (CNG) in road transport

 As an economically viable inter-fuel import

substitution in petroleum sector.

 The commercial application of CNG

technology now forms an important
element of Government’s petroleum policy.

 HDIP’s CNG stations also act as Advanced

Fuel Resource Centres to advise the Government
on safety and regulatory aspects

 To conduct inspection, training and

human resource development.
 Canola Oil, a better substitute for Palm Oil

 Biomedical research shows that palm oil is high

in saturated fat and develops heart diseases.
 The National Health Heart, Lung and Blood
Institutes, World Health Organization have
advised less consumption of palm oil.
 On the other hand, Canola is considered
by GRAS (Generally recognized as Safe)
oil by the USFDA.
 Canola oil diet was found to have immense health
benefits for the bonding and reorganization of
tissues in the body.
 Researchers have discovered Regular average use
of canola oil reduces the chances of heart stroke
 Benefits on cholesterol and on lowering blood
pressure.
 Substitutes for Exports
 There is no possible substitute for exports in Pakistan.
 If Pakistan has to export something it has to export only that thing.
 Any substitute will not be accepted.
 For example if Pakistan has to export rice,cotton,vegetables or
fruits,
 There is no possible substitute for cotton,rice,vegetables or fruits
and for any other exports.
SOBIA AKHLAQ
ROLL NO.1548
Export Performance 2004-05
• a target of $ 13.7 billion.
• Our exports at the close of the year
amounted to $ 14.41 billion, an increase of
17% over last years export level.
 Textiles and Garment s export

Textile and Garments contributed 25.2%. It is

encouraging to note that five of the sub sectors
namely cotton cloth, knitwear, bed wear, readymade
garments and cotton yarn achieved exports in
excess of US$ one billion each during 2004-2005.
Export of rice
• During 2004-2005, export of rice, at US$ 933 million,
was 47.1% higher over the corresponding period of last
year,

• Exports of engineering goods

• Exports of engineering goods during this period
increased by US$ 101 million, accounting for a 5%
increase
Export Performance 2005-06
• PROBLEMS
To begin with, on 8th October 2005
The rapid increase in the international oil prices
The services sector
• Pakistan’s economy for a host of reasons including
employment, contribution to GDP, and as a driver of
economic growth.

• Merchandise exports
• last year we had set for ourselves an export target of
$ 17 billion
• our merchandise exports were around 16.5 billion
• In terms of sectors, during the period July 2005- May
2006,
• Textile exports increased by $ 1.39 billion,
• Rice by $ 178 million,
• Leather products by $ 152.5 million,
• Petroleum products by $ 242 million,
• Chemicals by $ 23.1 million
• And other miscellaneous items by $ 888 million.
Export Performance 2006-07
• During the first 11 months of 2006-07, for example
• The Petroleum Group
• Imports increased by 11.1% as compared to the same
period of 2005-06. Despite the challenges that our
exports have had to face during last year, they have still
continued to grow.
The exports of Textiles Group
• During the first 11 months of 2006-07, the exports of
Textiles Group increased by 6%.
• Among these, Art Silk & Synthetic textiles have grown by
122%, Tents and Canvas by 99%, and Yarn other than
cotton yarn by 82.7%.
The services sector
• Transportation
• Travel
• Communication
• Construction
• Insurance
• Financial
• Computer
• information
• Royalties and License fees
• other Business services
• Personal
• Cultural Recreational services
• Government services.
Textile exports

• During the first 11 months of 2006-07 growth rate of

textile exports increased to 6.0% from 14% during the
corresponding period of 2005-06. Within he textiles
group,
• The export of bed wear declined by 3.1%,
• Cotton cloth by 4.1%
• Export of raw cotton decreased by 21.7%.
Other factors affecting our export growth
• Stiff international competition in Textile products from
China, India,
• Vietnam and Bangladesh in our major markets of the
US and the EU;
• NAFTA (North American Free Trade Area),
• CAFTA (Central American Free Trade Area)
• the setting up of U.S. sponsored Qualified
• Industrial Zones (QIZs) in Jordan and Egypt
• fall in unit prices in the textile sector,
• The 5.8% average antidumping duties in the European
market on our bed-linen exports.
Services sector & Investments
• Our fast growing Services sector has been a boon for the economy
which now
• Comprises 53.3% of our GDP.

Electronics and electrical goods

• One of the product groups showing dynamic export growth during
the last 20 yearsis Electronics and electrical goods.

• Pakistan is now well-placed to make use of newOpportunities in

these areas since a good domestic base has been set-up in the
last5 years via tariff rationalization and elimination of import
substitution programmes.
REASONS FOR DEFICIT IN
BALANCE OF TRADE

Nasiba Waris- 139

 TRADE DEFICITE

The negative difference of the value

of goods and services exported out
of a country less the value of goods
and services imported into the
country
REASONS FOR TRADE DEFICITE IN PAK

• ELECTRICITY SHORTFALL
• POLITICAL INSTABILITY
• BUISNESS OPPORTUNITIES
• RISING OIL PRICES
• COUNTRY CROP SMUGGLING
• LOE RETURN ON CAPITAL
• LABOR FORCE
Electricity shortfall

• Pakistan now faces a huge

electricity shortfall. Recently in
southern Punjab and the port city
of Karachi, traders and
businessmen burned tyres and
marched in the streets to protest
power cuts.
Political instability:

• Continuing political instability in Islamabad has also

weakened investor confidence in Pakistan, putting
downwards pressure on the stock exchange, which
recently recorded its lowest day of trading in terms of
volume.
Business Opportunities
• it is a matter of great concern that despite
the enormous potential and attractive
business opportunities in Pakistan, the
potential investors did not come out with
money at the desired level due to various
reasons, especially the unpredictable
policies and law and order situation in the
country.
Rising oil prices:
• Rising oil prices and the import of
machinery have severely burdened the
balance of trade as the trade deficit
reached $3.5 billion in just nine months
in the previous years.
 labor force
• There exists surplus labor force in Pakistan, the
quality of such a labor is relatively poor in terms
of productivity. A good quality labor with
technological, and managerial competencies is
considered to be significant in improving the
competitiveness of countries for inward FDI. But
there appears to be a lack of such qualities and
skills in labor force in Pakistan.
 Low Return on Capital:

• Low return on capital, low productivity of labor

and high rate of bank interest, increased
wastage of inputs are the other factors which
have made Pakistani products more expensive
than those from neighboring countries
Country crop smuggling:
• Much of the country’s crop was
smuggled to the country’s neighbour,
Afghanistan, where so much farming
land is dedicated to growing a $3bn
poppy crop that severe food shortages
caused such a brisk smuggling trade
that the Pakistani army had to seal the
border on occasions.
Kiran zahra
Roll no 1550
Government Programs to Help
Finance Exports
 Government Programs to Help
Finance Exports

There are three important factors in

Finance exports are as given below
• services
• Manufactures
• Trading
Services
Pakistan Export Finance
Guarantee

The Agency plans to offer a spectrum of 14 separate

guarantee products and service at the pre-shipment
stage, to the export, indirect export and finance
communities.
14 separate guarantee services are given
below
• Specific Transaction Guarantees:
• Whole Turnover Guarantees, Open Account Sales Only:
• Group-Wide Guarantees:
• Facilities Upgrade:
• Counter trade/Barter:
• Bid Bonding:
• Performance Guarantees:
• Inventory Replenishment:
• Agency Sales:
• Future Receivables:
• EDI
• Post-Shipment:
• Advisory:
 Separate Guarantee services

Specific Transaction Guarantees:

“Guarantee repayment for a specific pre-shipment
credit, on a single occasion”

 cost of up to 4% of transaction
 within the same 12 month period (rolling-basis)
and without claims experience,
 'would be discounted by one-quarter,
 on each occasion, with a reduction to 1% of
transaction value commencing the fourth and any
subsequent transactions (12 month rolling-basis).
Group-Wide Guarantees:
“Repayment guarantees for an entire category of supplier,
sector or geography-based. Premiums would be based
on group membership, remitted annually at start of 12-
month period”
 Guarantee cover would be customized, reflecting industry or
geographic specifics
 range of US$750-US$1,000, per group member
 US$25000
 (maximum exposure, at any one point in time) per group
member
 80% underwriting ratio, with proviso for a 90% option (with a
supplementary premium, best practices), with no limit on total
value of export shipments per 12 month period.
 Counter trade/Barter:
“Pre-shipment finance and working capital guarantees for exports
structured on the basis of counter trade/barter and other forms
of non-monetary payments settlement.”
Transaction support will be either transaction-specific or
limited whole turnover
Premium will set case- by-case.
 Whole Turnover Guarantees, Open
Account Sales Only:

1. Repayment guarantees, covering sales made on Open

Account or Net Terms basis
2. . Premium would vary with an estimated average of 2%,
depending of types of products to be exported and other
conditions per above.
3. The Agency will provide up to US$2,5 Million
cover, in any 1 month period (rolling basis), with
maximum underwriting liability, at any point in time,
of U100,000
 EDI
• Guarantees processed on the basis of EDI (Electronic
Document Interchange) and
• /or B2B Business-to-Business E-Commerce, using pre-
approved customer lists;
• Shipping companies;
• inspection services;
• trade intermediaries;
• and terms and maximum per transaction limits. Premiums will
be based on an annual registration fee and a per transaction
premium, tentatively set at 0.5% -1% of transaction value.
 Manufacturing:
Engineering Development Board (EDB)

State bank of Pakistan credit incentive schemes

Short Term Financing

Export Finance Scheme
Long Term Financing
Long Term Financing-Export Oriented Projects.
Locally Manufactured Machinery.
Export Finance Scheme (EFS):
Part-I Part-II
Transaction based facility Performance based facility
Coverage to the extent of 100% of Facility is available to Direct
export order/LC/contract. Exporters only but not to Indirect
Facility is available at both Pre & Exporters
Post shipment stages to DE Exporters are allowed a revolving
Facility available to IE at Pre- cash credit limit equivalent to 50%
shipment stage only of their total value of goods
exported in the previous year.
Facility available to
The exporter can avail facility for
- Direct Exporters : 180 days the maximum period of 180 days.
- Indirect Exporters: 120 days
Performance required against
every transaction.
Mark-up Rate under EFS

 Mark up rate under EFS is fixed on monthly basis.

 Current Mark up rate is 7.5% plus Spread of banks

,which is 1%
Mark up Rates under LTF-EOP:

Tenure (inclusive Linked with *Rates for*Rates for

of grace period) PFIs Borrowers

Up to 2 Years Weighted Avg.4% p.a. 6% p.a.

Yields on 12
month T-bills

Over 2 but up to 3 on 3 Years PIBs 4% p.a. 6% p.a.

Years

Over 3 and up to on 5 Years PIBs 5% p.a. 7% p.a.

7-1/2 Years
 Banks/DFIs Eligible to Grant Finances:
All banks/DFIs are eligible to grant finance under the Scheme
subject to their approval as Participating Financial Institutions
(PFIs) by SBP.

Repayment of Finance/Refinance:
• Loan is repayable in half-yearly or quarterly installments.
Scheme provides multiple options of repayments:
• Upto 2 years (without any graces period)
• Over 2-3 years (including grace period of 6 months)
• Over 3-5 years (including a grace period of 1 year)
• Over 5-7½ years (including a grace period of 1½ years)
Trading:
Trade Development Authority of
Pakistan
Scheme for Freight Subsidy on Exports
“The scheme will be called “Scheme for Freight
Subsidy on Exports”, hereinafter referred to as
“the scheme”.

Admissibility of Freight Subsidy:

• 25% freight subsidy on exports of Eligible Products
• Freight subsidy will be available on C&F/CIF shipments
• No individual exporter / firm / company will be entitled
to freight subsidy exceeding Rs. 5 million in a year
 Export Finance Scheme:
“ The Export Finance Scheme of the State Bank of
Pakistan has been in operation since 1973 and has been
a major source of banks’ credit to the exporters”

Incentives:

 Lending banks/DFIs.Clean Exposure:

 No Banks / DFIs shall provide unsecured / clean
financing facility,
 in any form, of a sum exceeding Rs 500,000/- (Rupees
five hundred thousand only)
CURRENT TRADE POLICY
&
SUGGESTIONS

Salma Bashir - 126

Export Measures
Temporary Importation for Exports
Plant, machinery and equipment imported to setup a unit in DTRE
scheme will be exempt from duty and taxes.
Inputs in DTRE will also be allowed to be imported from India, even
if these are not included in the importable items from India, or
manufactured locally.

Zero Rating of Exports

zero rating’ to exports by refunding of indirect taxes on input cost
incurred on manufacturing of merchandise, which is exported.
Pharmaceuticals
providing it with the incentive of having an accelerated
depreciation allowance facility of 90% in the first year on
investment
decided to allow exporting companies to send free samples to the
extent of 10% of the commercial quantity exported
this sector would also be allowed to retain 15% of their export
proceeds.
 Seafood
Consultancy services will be arranged through INFOFISH for
aquaculture
Peeling shed at Karachi Fish Harbor will be set up.
Training programme for fishermen in catching of fish will be
arranged.
Leather
6% mark up subsidy on loans to setup in-house effluent treatment
plants was provided.

Furniture
Ministry of Industries would set up a wood seasoning plant and
NAVTEC will set up a couple of vocational training centres on
modern lines to meet these deficiencies.
Rice
Ministry of Food and Agriculture may focus on evolving new varieties
& increasing area under cultivation
Paddy harvesters & Paddy dryers may be provided on matching grant
basis in rice growing areas. Furthermore rice farm machinery namely
paddy harvesters and dryers will be importable from India through
Wahga by road

Handicrafts
Consultants of international repute would be
engaged to suggest improvements in the
development of handicrafts.
Arrangements will be made to expose master craftsmen to international
designs and trends
Export of halal food products-established a halal
certification board
Automobile sector
allow to send us$ 50,000 worth of samples to foreign buyers
northern areas
Import Measures
• Import of Used Buses (TR Scheme)
buses not older than 3 years are permissible for import under the TR scheme
allow import of buses which are not more than 05 years old under the same
scheme.
• Secondhand / used cement bulkers- allowed but they will not be
older than 10 years.
• Reducing Cost of Doing Business
• In order to reduce cost of raw material imports and thereby make our export
products more competitive the import of Job lot & Stock lots of raw material,
which attracts duty up to 5%, would now be allowed
• Import of CNG Buses from India
Customs Duty on the import CNG Buses was brought from 15% to
zero .
In case any Indian manufacturer of CNG buses makes a firm
commitment to establish manufacturing of such buses in Pakistan,
the Ministry of Commerce may provide special dispensation for
import of 10 buses by road via Wahga from each possible investor
as test consignments.

• Stainless Steel and Cotton Yarn- import by train & also by

trucks through Wahga .

• Academic, Scientific and Professional Books-allowed

from india
SUGGESTIONS to IMPROVE IMPORT & EXPORT
Promotion of labor-intensive industrie
Diversification of exports
Development of industries having low capital output ratio:
Decrease in consumption:
Restoration of sick industries:
Reduction in export duties:
Joint ventures:
Improve access to credit:
Improvement of physical infrastructure:
Joint Venture with China:
Development of Power-loom Sector