The Economic Coordination Committee (ECC) has approved a Rs 98 billion subsidy package to reduce borrowing costs for exporters and stimulate Pakistan’s export sector after overseas shipments declined by 6% in the last fiscal year.

Chaired by Finance Minister Muhammad Aurangzeb, the ECC endorsed three major export support initiatives, including an enhanced Export Finance Scheme (E-EFS), a new Long-Term Export Growth Financing Facility (LTEGFF), and a performance-based rebate programme for exporters. The government estimates the overall subsidy cost of these schemes could reach Rs270 billion over the next 10 years at current interest rates.

Under the revised Export Finance Scheme, exporters will be able to obtain six-month working capital loans at 8.5%, with the government covering 5% of the interest cost, requiring an estimated Rs58 billion subsidy this fiscal year. The ECC also increased the programme’s financing limit from Rs1 trillion to Rs1.5 trillion.

The newly launched LTEGFF will provide long-term financing for export-oriented projects and industrial modernisation, offering loans at 2% for the first two years and a fixed 5% rate for the following eight years. Around Rs350 billion in financing is expected to be extended under the scheme, with subsidy costs estimated at Rs196 billion over its duration.

In addition, exporters recording annual export growth of up to 10% will qualify for a 1% rebate on incremental exports, while those exceeding 10% growth will receive a 2% rebate. The incentive programme is expected to cost Rs15 billion annually and is intended to encourage higher export performance and strengthen Pakistan’s external trade.