Industries hit back at decision to extend over Rs15bn to rice exporters

ISLAMABAD: The country’s export-oriented industries have reportedly reacted strongly to the government’s decision to extend over Rs 15 billion to the Rice Exporters Association of Pakistan (REAP) from the Export Development Fund (EDF), arguing that the entire export sector is facing losses — not the rice sector alone, well-informed sources told Business Recorder.

The decision was taken in a hurriedly-convened meeting of the EDF Board, chaired by the Minister for Commerce, sources said. Following the decision, several export associations are preparing to write to Prime Minister Shehbaz Sharif, seeking fairness and transparency in EDF disbursements.

The sources said, the decision is part of government’s strategy to focus on four countries, ie, China, Philippine, Bangladesh and Indonesia.

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Commerce Minister has already held meetings with the ambassadors of these countries to discuss strategy and enhance rice quotas.

Rice exporters were of the view that they are not competitive in the markets of these countries due to higher tariffs, seeking relief in local taxes.

According to exporters, Duty and Tax Remission for Export (DLTL) or similar relief measures are not an EDF subject, but a policy initiative of the federal government under the Ministry of Commerce. In the past, such incentives were provided through budgetary allocations under government-announced export packages to improve competitiveness and ensure a level playing field.

“We strongly oppose and object to the proposal placed before the EDF by REAP, as identical challenges are being faced by the value-added textile and apparel sector, which accounts for nearly 55 percent of national exports and is also the largest contributor to EDF, as well as by other agricultural export sectors such as fruits, vegetables, and agro-based products,” said a stakeholder, speaking on condition of anonymity.

Exporters have urged the Prime Minister to ensure that EDF funds —contributed by exporters themselves —are not utilised without the consent of contributing sectoral associations. They recalled that during a meeting held on November 26, 2025, the Prime Minister had directed the abolition of the Export Development Surcharge (EDS) and assured that the government would arrange alternative funding for EDF in the future.

“The federal government should, in principle, accord equal treatment to all export sectors, instead of favouring a single sector under a policy initiative. Any such incentivisation should be financed from government resources and extended to all sectors without discrimination,” the stakeholder added.

Exporters further suggested that, given the current global market challenges faced uniformly by all export sectors, the government should consider a one-time decision to return past EDS contributions to exporters across all sectors. They noted that comprehensive exporter data is already available on the Pakistan Single Window (PSW).

Meanwhile, in a recent major development, the government has decided to withdraw the 0.25 percent Export Development Surcharge (EDS) with immediate effect, providing long-awaited relief to exporters and enhancing Pakistan’s competitiveness in international markets.

The EDS was levied at 0.25 percent of export value, collected at the time of realization of export proceeds and credited to the Export Development Fund. The EDF is a government-backed pool financed through the surcharge and is used to support export promotion initiatives, including training institutes, trade missions, research, marketing, and export-related infrastructure.

Copyright Business Recorder, 2026