ISLAMABAD, July 18: The trade policy for the fiscal year 2008-09 unveiled on Friday sets an ambitious export target of $22.10 billion, but avoids projecting an import target because of rising international oil and food prices.

The policy, announced by Commerce Minister Ahmad Mukhtar at a press conference, offered a number of incentives for traditional products. It envisages establishment of 11 new industrial clusters, reactivation of the Federal Export Promotion Board and review of the TDAP Ordinance to improve its working.

The horticulture sector has been declared an industry.

A proposed package of subsidies for the textile sector was not announced, but it is expected to be made public soon.

Import of more than 136 new items from India has been allowed. Of these, 72 tariff lines were added to the importable list for raw materials, chemicals and industrial inputs, nine tariff lines for pharmaceutical products and vaccines, two for fruit and vegetables, 19 for fertiliser, 32 for machinery and parts and two for POL and diesel.

With the inclusion of these items, the total list of tradable products with India has been increased to 1,938 tariff lines from earlier 1,837. The global import of these 136 tariff lines stood at $2.8 billion of which $2.2 billion was spent only on import of POL and diesel.

This means the government has diverted this import value of $2.8 billion to India which will increase its exports to over $3 billion from the current level of $1 billion and become the second largest trading partner of Pakistan after China.

After this increase in imports from India, the grant of MFN status to India would become meaningless, but commerce minister linked it with the removal of non-tariff measures by India.

A Halal Certification Board will be set up to devise a standard and certification mechanism for the export of Halal food products. Import of paddy harvesters and dryers from India will be allowed through Wagha by road.

The government will allow the import of used buses not more than 10 years old under the transfer of residence scheme for overseas Pakistanis and import of CNG buses from India.

If Indian manufacturers of CNG buses make a firm commitment to manufacture such buses in Pakistan, the ministry of commerce may provide special dispensation for import of 10 buses by road via Wagha from each possible investor as test consignments.

Duty and taxes have been withdrawn on plant, machinery and equipment imported to set up a unit under the Duty and Taxes Remission for Export (DTRE) scheme. Inputs in DTRE have been allowed to be imported from India, even if these are not included in the importable items from India, or manufactured locally.

The period of retention of raw material and components for export under temporary importation scheme (SRO 1065) has been increased from 12 months to 18 months -- at par with DTRE.

The duty drawback rate has been increased by one per cent of the FOB value for 14 traditional products, including tents, canvas and tarpaulin, electric machinery, carpets, rugs and mats, sports goods, footwear, surgical goods/medical instruments, cutlery, onyx printers, electric fans, furniture, autoparts, handicrafts, jewellery and pharmaceuticals.

A new scheme has been introduced under which a notified percentage of inputs may be allowed to be imported at zero duties against FOB value of exports with flexibility to import any product among the notified list in any quantity within the overall entitlement of the exporter.

The trade policy proposed to allow the temporary import of PET bottle scrap for manufacture and export of PSF in the DTRE scheme, subject to non-hazardous certification. It has been decided to support the setting up of new pharmaceutical plants by providing it with the incentive of having an accelerated depreciation allowance facility of 90 per cent in the first year on investment in plant machinery and equipment.

Imports of gold, silver, platinum, palladium, diamond and precious stones have been exempted from customs duties and sales tax to increase exports and encourage investments in the sector.

The import of machinery/equipment for mining/quarrying and grinding of minerals (along with spares) will be allowed from India to improve availability of good quality stones for further processing.

It has been decided that the subsidy given to exporters to comply with environmental standards from the Export Development Fund (EDF) will be increased to eight per cent or 50pc of the mark-up, whichever is lower.

The horticulture sector has been declared an industry to qualify it for industrial credit, relief in taxation, etc., thus facilitating much-needed modernisation and infrastructure development in the sector.

Under the import regime, it has been decided to allow the import of used cryogenic containers/cylinders and second-hand cement bulkers not more than 10 years old and increase the age limit of prime movers to five years.

Import of Job and Stock lots of raw material, which attracts duty up to five per cent, will now be allowed.

Import of stainless steel and cotton yarn by trucks through Wagha has been allowed. Import of used motorcycles or tri-wheeler vehicles, especially designed/made or altered for the handicapped, will be allowed, subject to a disability certification from the ministry of health.

Re-export of vehicles imported by overseas Pakistanis and import of academic, scientific and reference books from India have been allowed.