ISLAMABAD: Pakistan Customs has identified approximately 150 exporters engaged in widespread misdeclaration of the weight of rice consignments, which could enable them to claim inflated subsidies.

The Collectorate of Customs (Exports), Karachi, has held a meeting with the Rice Exporters Association of Pakistan (REAP) to address what they described as a recurring compliance failure among exporters in availing the subsidy on rice exports.

Well-placed sources told Dawn on Tuesday that the customs authorities have raised the alarm over the growing misuse of export facilitation mechanisms after detecting widespread misdeclaration of weight in rice export consignments.

As per the details, multiple consignments were found carrying discrepancies between declared and actual weights. The issue was serious enough for customs officials to convene a formal meeting with members of the REAP to address the issue.

Identifies 150 exporters misdeclaring weights

The Ministry of Commerce has allocated approximately Rs15 billion for a rebate scheme on local taxes and levies for rice exporters. Exporters of basmati and brown rice are eligible for a 9 per cent rebate on the FOB value, provided the export price is at or above $750 per tonne.

Other coarse rice qualifies for a lower rebate of 3pc of FOB value, but only where the export price remains below $750 per tonne.

According to officials familiar with the discussions, misdeclaration of weight allows exporters to exaggerate shipment volumes in documentation, which can then be used to claim higher financial benefits under export incentive schemes tied to quantity or value. This creates a dual distortion by inflating subsidy payouts while also undermining fair competition within the sector.

The REAP acknowledged that customs authorities had expressed serious concern over these irregularities and warned its members against engaging in such practices. The association advised exporters to ensure strict compliance with dec­lared weights and customs regulations, while distancing itself from any firm found involved in fraudulent reporting.

According to exporters, the manipulation typically occurs at the documentation stage, where shipment weights are overstated relative to the actual cargo loaded. Weak verification mechanisms at certain points in the export chain can allow such discrepancies to go undetected unless they are flagged by audits or inspections. Customs officials have signalled that enforcement may be tightened, with possible penalties, recovery of undue benefits, and legal action against violators, according to the official sources.

The association has also cautioned that it will not support members found guilty of misdeclaration, placing responsibility squarely on exporters to maintain transparency in export transactions. The development highlights broader concerns about governance gaps in export subsidy regimes, where documentation based claims remain vulnerable to manipulation without robust cross verification of physical shipments.

Published in Dawn, June 24th, 2026