ISLAMABAD: At a time when the country’s export proceeds are declining, the government has released Rs10 billion in payments against decade-long outstanding subsidies and textile upgradation claims, offering partial relief to exporters struggling with cash-flow constraints.
The release of a bulk amount in one go comes as the textile sector grapples with surging production costs amid the ongoing Middle East conflict, while export receipts in FY26 fell short of the target due to multiple pressures. However, an outstanding amount of Rs1.94bn remains unsettled.
The bulk of the authorised amount relates to the Textile Upgradation Fund (TUF) for 2009-14, which alone accounts for Rs4.35bn. Another Rs4.18bn has been cleared under the Duty Drawback of Taxes (DDT) for 201,821 in the textile sector. These sizeable allocations underscore that refunds from decade-old trade policies had remained pending, tying up exporters’ liquidity and complicating their competitiveness in global markets.
Textile, non-textile dues partially cleared as Rs1.94bn still outstanding
Further details show that the allocation also covers smaller but long-pending claims. These include Rs1.77 million under the Duty Drawback of Local Taxes and Levies (DLTL) Order 200912 for the textile sector, and Rs231.87m under the DDT Order 201718, also for textiles.
For the non-textile sector, the government has released Rs127.79m under the Local Taxes and Levies Drawback (LTLD) Order 2017 and Rs1.09bn under LTLD Order 2018. These allocations, though smaller in scale than the textile-focused schemes, are significant because they address long-pending claims from industries outside the textile value chain.
The LTLD mechanism was introduced to provide exporters in non-textile sectors — such as leather, sports goods, surgical instruments, and other value-added industries — relief against local taxes and levies that eroded their competitiveness in international markets.
By reimbursing part of these costs, the scheme aimed to encourage diversification of Pakistan’s export base beyond textiles. Trade analysts said that the release of LTLD refunds is particularly important for smaller exporters, who often face tighter liquidity constraints and rely on timely reimbursements to sustain operations. Clearing these dues after years of delay is expected to ease working capital pressures and help non-textile exporters regain some footing in global trade.
An official announcement quoting Commerce Minister Jam Kamal Khan has said his ministry has sanctioned Rs10bn for the textile and apparel industry and other export sectors under the Duty Drawback and Technology Upgradation Schemes, aimed at improving industrial liquidity and supporting export growth. Interestingly, the commerce ministry did not mention that the amount was released to clear decade-old pending dues owed to exporters.
“I hope this will improve the liquidity of industry and enable them to enhance exports,” the minister remarked, adding that the sanctioned funds are expected to provide much-needed liquidity support to export-oriented industries and facilitate technological upgradation, enabling exporters to improve their competitiveness and expand their presence in international markets”.
Pakistan Textile Exporters Association Patron-in-Chief Khurram Mukhtar welcomed the move, crediting the authorities for liquidating such old refunds in one go. He, however, pointed out that Rs1.94bn in outstanding claims remain and should be released as a supplementary grant to fully settle exporters’ dues.
He said that only a comprehensive refund clearance would allow manufacturers to stabilise cash flows and regain competitiveness in global markets.
Published in Dawn, August 9th, 2026
