Govt Clears Rs10bn in Decade-Old Export Refunds

The government has released Rs10 billion against long-outstanding export subsidies and textile upgradation claims, providing some relief to exporters facing growing cash-flow pressures and rising production costs.

 

The payment comes as Pakistan’s export performance remains under pressure, with FY26 receipts falling below the targeted level. The textile industry is also dealing with higher production costs amid ongoing geopolitical tensions in the Middle East. However, Rs1.94 billion in claims remains outstanding.

 

The largest portion of the released funds, around Rs4.35 billion, relates to the Textile Upgradation Fund (TUF) for 2009-14. Another Rs4.18 billion has been cleared under the Duty Drawback of Taxes (DDT) scheme for the textile sector, covering 201,821 claims.

 

The government has also settled several smaller but long-pending claims. These include Rs1.77 million under the Duty Drawback of Local Taxes and Levies (DLTL) Order 2009-12 and Rs231.87 million under the DDT Order 2017-18 for textile exporters.

 

For non-textile exporters, the government has released Rs127.79 million under the Local Taxes and Levies Drawback (LTLD) Order 2017 and Rs1.09 billion under the LTLD Order 2018.

 

The LTLD scheme was designed to help non-textile exporters, including leather, sports goods and surgical instrument manufacturers, recover local taxes and levies that increase the cost of their products in international markets.

 

Commerce Minister Jam Kamal Khan said his ministry had sanctioned Rs10 billion for the textile, apparel and other export sectors under duty drawback and technology upgradation schemes. He said the funds would improve industrial liquidity, support technological upgrades and help exporters strengthen their competitiveness.

 

Pakistan Textile Exporters Association Patron-in-Chief Khurram Mukhtar welcomed the release, particularly the clearance of the old claims in a single payment. However, he called for the remaining Rs1.94 billion to be released through a supplementary grant so that all outstanding exporter dues could be settled.

 

Mukhtar said clearing the remaining refunds would help manufacturers improve cash flows, strengthen their competitiveness and expand their presence in international markets.