ISLAMABAD - The government on Friday unveiled the trade policy for the current financial year with the projected export target of US $ 22.1 billion, reflecting a clear-cut policy tilt towards India, allowing imports of various items, from books to fuel.   The government could not give an import projection for this year to avoid embarrassment, showing its inability to cope with the widening gap between exports and imports. The trade deficit had soared to US $ 20.7 billion in the fiscal year ended on June 30, which was much higher than the government projection of US $ 13 billion. Though the government has not formally announced any import target but the Commerce Ministry officials were talking about around US $ 37 billion that could result in US $ 15 billion trade deficit by June 2009.       Announcing the policy through state run media, In-charge Minister for Commerce Ahmad Mukhtar said, "We are also facing stress in this current year due to the large trade gap of US $ 20.77 billion, and our strategy to enhance exports is the best method to address this problem." The Commerce Ministry also got help from its out-stationed commercial consulars and invited them from Australia to Middle East to finalize the trade policy draft. PPP government is carrying the same team of trade officials that were part and parcel of the previous ruling government.    He narrated his government's ordeal, "We have inherited a very difficult economic situation where the public is facing more hardships than it has in recent history. This was due to external and internal factors of the past years." On the external front, he highlighted, the most difficult issues were; the doubling of international oil prices from around $ 68 per barrel to $ 145 per barrel during the year; and the increase in international prices of food items that Pakistan needed to import during the year, especially wheat and edible oil. The Indian-specific policy measures included; Inputs in Duty and Tax Remission Export (DTRE) will also be allowed to be imported from India, even if these are not included in the importable items from India, or manufactured locally. Defending the incentives extended to India, Minister for Commerce said, "India is our neighbour and we are gradually liberalizing our bilateral trade. Composite Dialogue process, especially on economic and commercial cooperation has been instrumental in addressing the bilateral issues. We are announcing to enlarge the list of importable items from India, which is based on the requests of our stakeholders." Cheaper raw material sourced from India would make our exports more competitive in international market. Although the list is being issued separately, I may mention that we are allowing import of diesel and fuel oil from India, because it will be cheaper due to the difference in transportation cost. This will also help us to address our global trade deficit, he maintained. Customs duty on the import of CNG Buses was brought from 15% to zero in the Budget 2008-09. In case any Indian manufacturer of CNG buses makes a firm commitment to establish manufacturing of such buses in Pakistan, the Ministry of Commerce may provide special dispensation for import of 10 buses by road via Wahga from each possible investor as test consignments. Stainless steel and cotton yarn is importable from India by train. In order to further reduce the cost of doing business, it has been decided to allow their import by trucks through Wahga as well. The prices of academic, scientific and reference books are quite competitive in India and technical and professional books are already importable from India. Now in order to give access to our people to cheaper books it has been decided that import of academic, scientific and reference books may be allowed from India, the Minister argued. Mining industry has serious problems of availability of good quality stones for further processing due to blasting which creates wastage of precious resources. To remedy this it has been decided that import of machinery/equipment for mining/ quarrying and grinding of minerals (along with spares) would be allowed from India. To facilitate exports to Afghanistan provinces of Paktia (Gardez) and Khost, it has been decided that a Customs station at Pak-Afghan border would be set up at an appropriate location. This will reduce transportation cost and delivery time to this area from Pakistan. According to the policy, some temporary imports for export purposes were also allowed. In order to reduce cost of manufacturing and to make our exports more competitive, it has been decided that plant, machinery and equipment imported to set up a unit in DTRE scheme will be exempt from duty and taxes. The Government is committed to providing complete 'zero rating' to exports by refunding of indirect taxes on input cost incurred on manufacturing of merchandise, which are exported. In order to facilitate the exports, the Government has decided to introduce a new scheme whereby 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. In view of the good export prospects of pharmaceutical exports it has been decided to support the setting up of new Pharmaceutical Plants by providing them with the incentive of having an accelerated depreciation allowance facility of 90% in the first year on investment in Plant Machinery and Equipment. It has also been decided that Ministry of Health will draw up a proposal for establishing bio-availability and bio-equivalence laboratories in the National Institute of Health. Area under rice cultivation is under pressure from other crops and the yield is decreasing as no high yielding basmati variety after "Super Basmati" has been introduced. The cumulative effect of these two factors could erode the exportable surplus. It is therefore proposed that Ministry of Food and Agriculture may focus on evolving new varieties and increasing area under cultivation. Initially for demonstration purposes four dryers and harvesters will be provided from the Export Development Fund to Ministry of Food and Agriculture. Furthermore rice farm machinery namely paddy harvesters and dryers will be importable from India through Wahga by road. Exporters are allowed to send US$ 25,000 worth of samples to foreign buyers. Since automobiles have higher unit value, therefore it has now been decided to increase the limit to $ 50,000 in the case of automobiles. An effective trade dispute settlement mechanism increases confidence of foreign buyers to purchase from Pakistan and the present system is ineffective. Therefore it has been decided that a Trade Dispute Settlement Organization, under the administrative control of Ministry of Commerce, will be set up to deal with trade disputes arising from exports. It has been decided to revisit the working and structure of TDAP so as to make it more responsive to the exporters' needs. In the near future necessary changes including warranted amendments in the TDAP Act will be undertaken for this purpose. Free Trade Agreement with China, especially the Investment Chapter of the Agreement was renegotiated. The objectives of these negotiations were to provide facilitation and relief in taxes for setting up of industrial units in China Specific Zones in Pakistan with at least 40% FDI from China.   About import of buses, presently buses not older than 3 years are permissible for import under the TR scheme. It has now been decided to allow import of buses, which are not more than 10 years old under the same scheme. This facility will help expatriate returning Pakistanis with limited means to create an economic opportunity for themselves as well as ease the shortage of such buses on inter city routes. In order to facilitate physically handicapped persons, it has been decided that used motor cycles or tri wheeler vehicles especially designed/made or altered for the handicapped would be allowed to be imported, subject to disability certification from the Ministry of Health. If Pakistani nationals importing a vehicle are unable to release their vehicle due to high tariff or other reasons, re-export of such vehicle would be allowed by FBR if there was no contravention of the Import Policy Order during import stage. It has also been decided to do away with the requirement of a driving licence for the TR scheme. In order to prevent unscrupulous elements from selling unrefined palm oil in the market and endangering public health, it has been decided that only recognized manufacturers would be allowed to import crude palm oil for further processing and refining. Furthermore manufacturers who import palm oil in crude form will not be allowed to sell it to non-manufacturers. Monitoring Desk adds: Giving boost to bilateral trade, Pakistan allowed import of diesel and CNG buses from India, besides adding 136 commodities to the positive list of items that can be sourced from the neighbouring country, reports Indian media. The changes have been incorporated in the new trade policy announced by the government. Pakistan has not fully implemented the the South Asian Free Trade Agreement, restricting the trade to a positive list of items. India on the other hand allows trade with Pakistan on all but a few items in the negative list. Though the trade between the countries has seen a big jump to over 1 billion dollar over the past few years, a large part is still routed through third countries, adding cost to consumers.