The government has provided maximum tax incentives and concessions to the textile sector, including exemption of customs duty on import of a wide range of textile machinery and equipment, which has enhanced exports of textile products during the second quarter (October-December) 2009-10.

Federal Secretary for Textile Industry Waqar Masood Khan said that the government had fulfilled a major demand of the textile sector to zero-rate duty on the import of textile machinery. The new textile policy had started showing good results following issuance of notifications in September. This is evident from increase in textile exports during the second quarter (October-December).

On monthly basis, he said, textile exports had increased by $825 million, however, exports during the first quarter of the current fiscal were not significant, but the situation started improving after the announcement of the new textile policy in August.

Waqar Masood said in April-June (2008-09), textile exports stood at $725 millions per month in the said quarter. When contacted, leading textile exporters said that under the new policy, the Ministry of Textile had issued three notifications to facilitate the industry. They said the textile manufacturers would receive three-percent drawback on garments, 2% on home textile and one percent on fabrics. A relaxation of 2.5% was given in the interest rate under the export-financing scheme.