The Ministry of Commerce has requested “special incentives” for export-oriented sectors affected by ad-valorem tariffs of 19% recently imposed by the United States, Business Recorder, citing sources.
Commerce Minister Jam Kamal Khan reportedly sought Prime Minister Shehbaz Sharif’s support to implement handholding measures for the impacted sectors.
Pakistan’s additional ad-valorem tariff of 29% was reduced to 19%, lower than its regional competitors including Bangladesh, Vietnam, and India, as announced in a US Presidential Executive Order on July 31, 2025.
On August 6, 2025, the US imposed an additional 25% tariff on India, further giving Pakistan a 31% competitive advantage.
Following these developments, on August 11, 2025, the Ministry of Commerce convened a meeting under the chairmanship of the Commerce Minister and Special Assistant to the Prime Minister on Industries and Production. Representatives from leading exporters and SMEs across sectors including apparel and textiles, rice, salt, surgical goods, sports goods, electronics, food and agriculture, and leather discussed a forward-looking plan to boost exports to the US.
Industry representatives acknowledged the government’s efforts in trade diplomacy but urged for predictable and favourable policies to create an enabling business environment and reduce manufacturing costs.
To maintain regional competitiveness and capitalise on US trade opportunities, the Commerce Ministry submitted detailed recommendations to the Prime Minister.
These included authorisation for Rs 12 billion in August 2025, out of a budgetary allocation of Rs 15 billion for FY2025-26, for the clearance of verified Drawback of Local Taxes and Levies (DLTL) claims on a first-in-first-out basis by the State Bank of Pakistan, along with a supplementary grant of Rs 12.32 billion to clear remaining verified claims under Government Support Schemes in the second quarter of the current fiscal year.
The ministry also recommended that the Federal Board of Revenue process future refunds within 72 hours as per Sales Tax Rules, 2006, revaluate customs valuation of mango pulp in consultation with the industry, withdraw sales tax on purchases from local manufacturers to June 2024 levels, address exclusions under the Export Facilitation Scheme, and rationalise double taxation for exporters.
For the Power Division, the ministry proposed removing cross subsidies from industrial power tariffs. For the Petroleum Division, it suggested resolving outstanding RLNG bill arrears in line with OGRA determinations, rationalising RLNG tariffs for industrial consumers, removing off-the-grid levies and cross subsidies, and addressing price disparities among various consumers.
The Maritime Affairs Division was asked to reduce shipping time to the U.S. from 48 days to 24 days. The Commerce Ministry also proposed the announcement of new DLTL incentive schemes to further support exporters.
These measures are aimed at enabling export sectors to remain competitive and seize future opportunities in the U.S. market amid evolving trade conditions.
