How to Export - Pakistan

HOW TO EXPORT

Pakistan (Fifth Draft)

MINISTRY OF EXTERNAL RELATIONS

Department of Trade and Investment Promotion

Trade Information Division

i How to Export - Pakistan

Table of Contents

List of Acronyms ...... viii 1. INTRODUCTION ...... 1 Maps ...... 2 1.1 Basic Information ...... 4 1.2 General Characteristics ...... 6 1.2.1 Geography ...... 6 1.2.2 Distances ...... 7 1.2.3 Climate ...... 8 1.2.4 Population, Urban Centres and Social Indicators ...... 9 1.2.5 Major Urban Centres ...... 11 1.2.6 Key Socioeconomic Indicators ...... 11 1.3 Political System ...... 17 1.3.1 Ministries and Key Economic Bodies ...... 18 1.3.2 Key Governmental Economic Bodies with Relevance to Foreign Trade ...... 18 1.4 Administrative Organization ...... 19 1.4.1 Legislative Branch ...... 19 1.4.2 Executive Branch ...... 20 1.4.3 Judicial Branch ...... 20 1.4.4 Elections and Voting System ...... 21 1.4.5 Provincial Administration and Governments ...... 21 1.4.6 List of International Agreements to Which Pakistan is a Signatory ...... 22 1.4.7 Trade Treaties ...... 23 2. ECONOMY, CURRENCY AND FINANCES ...... 24 2.1 Economic Setting ...... 24 2.1.1 General Characteristics of the Economy ...... 24 2.1.2 Current Development Stage ...... 24 2.1.3 Pakistan Economy – Recent Developments ...... 25 2.1.4 Share of Capital Goods Imports in Developing the Domestic Industrial Base...... 25 2.1.5 Unemployment Level over the Past 5 Years ...... 26 2.1.6 Inflation Rates ...... 26 2.2 Principal Economic Sectors ...... 27 2.2.1 Agricultural Sector ...... 27 2.2.2 Mining Sector...... 28 2.2.3 Manufacturing Sector ...... 30 2.2.4 Energy Sector ...... 32 2.2.5 Services Sector ...... 34 2.3 Currency and Finances ...... 34 2.3.1 Currency and Exchange Rate ...... 34 2.3.2 Convertibility and Foreign Exchange Rate ...... 35 2.3.3 Balance of Payments and International Reserves...... 35 2.3.4 International Reserves ...... 37 2.3.5 IMF Reserve Position ...... 38 2.3.6 Special Drawing Right (SDR) ...... 38 2.4 Public Finances ...... 39 2.4.1 The Financial Sector ...... 39 2.4.2 Banking System ...... 40 2.4.3 Country Ranking by Different International Ranking Agencies ...... 41 3. OVERVIEW OF PAKISTAN’S FOREIGN TRADE ...... 42 3.1 Recent Trends: General Considerations ...... 42

i How to Export - Pakistan

3.1.1 Current Share of Country's Trade ...... 42 3.1.2 Pakistan's Trade with Developed Countries ...... 43 3.1.3 Pakistan's Trade with Oil Producing Countries ...... 44 3.1.4 Contribution and Structure of Foreign Trade ...... 44 3.1.5 Imports and Sectors of Imports with Largest Share ...... 46 3.1.6 Pakistan’s Foreign Trade and Growth ...... 48 3.2 Origin and Destination of Trade ...... 48 3.2.1 Export Destinations ...... 48 3.2.2 Origins of Imports ...... 50 3.3 Foreign Trade by Commodity Categories ...... 51 3.3.1 Imports by Major Commodity Categories ...... 51 3.3.2 Exports by Major Commodity Groups ...... 51 4. BRAZIL – PAKISTAN ECONOMIC RELATIONS ...... 53 4.1 Bilateral Trade: Brazil - Pakistan Economic Relations ...... 53 4.1.1 Recent Trends ...... 53 4.1.2 Breakdown of Bilateral Trade ...... 54 4.1.3 Pakistan Exports to Brazil ...... 55 4.1.4 Brazil’s Export to Pakistan ...... 55 4.2 Brazilian Exports to the World ...... 67 4.3 Brazilian Exports – Recent Performance ...... 68 4.4 Bilateral Investment ...... 70 4.4.1 Highlight Opportunities ...... 71 4.4.2 Net Negative Exports ...... 71 4.4.3 Net Positive Exports...... 72 4.5 Principal Bilateral Economic Agreements with Brazil ...... 72 4.6 Credit Lines from Brazilian Banks ...... 72 4.7 Opportunities for Brazilian Investors in Pakistan ...... 73 4.7.1 Brazil and Pakistan – Bilateral Trade Opportunities ...... 73 5. GENERAL RECOMMENDATIONS TO BRAZILIAN COMPANIES ...... 76 5.1 About the Country ...... 76 5.2 Suggestions for Brazilian Exporters ...... 76 5.3 Market Access ...... 78 5.4 Principal Segments ...... 78 5.5 Getting Information about Pakistan ...... 78 5.6 Delivery of Samples and Publicity Material to Local Importers ...... 78 5.7 Shipping Documents and Other Requirements ...... 79 5.8 Shipping Insurance...... 79 5.9 Shipping Supervision and Oversight ...... 79 5.10 Import Financing ...... 79 5.11 Trade Disputes and Arbitration ...... 80 5.12 Assistance from the Commercial Section of the Embassy of Brazil ...... 80 5.13 Most Convenient Distribution Channel ...... 81 5.14 Product Promotion ...... 81 5.15 Consulting Services ...... 81 5.16 Local Practices and Language ...... 81 5.17 Visiting Pakistan ...... 82 5.18 Professional Assistance ...... 82 6. MARKET ACCESS ...... 83 6.1 Tariff System ...... 83 6.2 Tariff Structure ...... 83 6.2.1 Regulatory Duty ...... 84 6.2.2 Additional Customs Duty ...... 84

ii How to Export - Pakistan

6.2.3 Classification of Goods ...... 85 6.2.4 Import Tariff Structure in Pakistan ...... 86 6.2.5 General System of Tariff Preferences in Pakistan ...... 87 6.3 Trade Agreements ...... 88 6.4 Regulation of Foreign Trade Activities...... 89 6.4.1 General Policy on Imports ...... 89 6.4.2 Basis of Imports ...... 89 6.4.3 Import of Goods ...... 89 6.4.4 Prohibitions and Restrictions ...... 89 6.4.5 Dispute about Import Status ...... 91 6.4.6 Relaxation of Prohibitions and Restrictions ...... 91 6.4.7 Imports Incentives ...... 91 6.5 Trade Strategy ...... 92 6.5.1 Administrative Import Rules ...... 92 6.5.2 Imports via Postal Means ...... 95 6.5.3 Legal Considerations ...... 96 6.5.4 Packaging and Labelling ...... 97 6.6 Exchange Rate Regime ...... 97 6.7 Practical Recommendation for Exporters: Procedures in Pakistan ...... 98 6.7.1 Customs Clearance ...... 98 6.7.2 Legal Requirements ...... 99 6.7.3 Clearance Procedure for Imports ...... 99 6.7.4 Documentation at the Destination ...... 99 6.7.5 Dry / Inland Ports in Pakistan ...... 100 6.8 Special Customs Regimes in Pakistan ...... 101 6.9 Special Customs Regimes in Brazil ...... 102 6.10 Principal Regimes Applied in Brazil...... 103 6.10.1 Ex-Tarifário ...... 104 6.10.2 Industrialized Product Tax (IPI)...... 104 6.10.3 Merchandise and Services Circulation Tax (ICMS) ...... 105 6.10.4 RECOF ...... 105 6.10.5 RECOF SPED ...... 106 6.10.6 REPETRO ...... 107 6.10.7 Virtual Warehouse – Inland Customs Warehouse ...... 108 6.10.8 Virtual Depot - Certified Bonded Warehouse ...... 110 6.10.9 Special Temporary Admission Regime ...... 111 6.10.10 Customs Clearance ...... 113 6.11 Drawback Regimes in Brazil ...... 114 6.11.1 Suspension Drawback ...... 114 6.11.2 Exemption Drawback ...... 114 6.11.3 Refund Drawback ...... 115 6.11.4 ”Verde-Amarelo” Drawback ...... 115 6.11.5 Integrated Drawback ...... 115 6.11.6 Special Deposit ...... 115 6.11.7 Temporary Exports ...... 115 6.11.8 Re-export ...... 115 6.11.9 Free Trade Zones and Duty Free Shops ...... 116 6.11.10 Useful Links ...... 117 7. TRANSPORTATION INFRASTRUCTURE ...... 118 7.1 Domestic Infrastructure ...... 118 7.1.1 Roads ...... 119

iii How to Export - Pakistan

7.1.2 China Pakistan Economic Corridor (CPEC) ...... 120 7.1.3 Pakistan Railways ...... 123 7.1.4 Waterways ...... 125 7.1.5 Maritime Ports and Connections ...... 126 7.1.6 Air ...... 132 7.1.7 Airports and International Connections ...... 134 8. SALES ...... 136 8.1 Distribution Channels ...... 136 8.2 Wholesale and Retail ...... 137 8.2.1 Retail Ownership Formats in Pakistan ...... 138 8.2.2 Fast Moving Consumer Goods (FMCG) Channels in Pakistan ...... 139 8.2.3 New Sales Channels ...... 141 8.3 Promoting Sales ...... 141 8.4 Recommendations to Brazilian Companies about Negotiations, Correspondence, and Sales Contracts ...... 145 8.4.1 Import Negotiations and Agreements ...... 145 8.4.2 Designating Agents...... 146 8.4.3 Opening Sales Representations, Subsidiaries and Franchises ...... 147 8.5 E-Commerce ...... 149 8.6 The Market Ecosystem for Brazilian Companies ...... 150 9 ANNEXES ...... 151 9.1 Summary Briefing ...... 151 9.2 Important Addresses ...... 152 9.2.1 Offices and Businesses in Pakistan ...... 152 9.2.2 Offices and Businesses in Brazil ...... 159 9.3 Chambers of Commerce ...... 160 9.4 Key Local Trade Associations ...... 160 9.5 E-Commerce Firms ...... 164 9.6 Consumer Rights Commission of Pakistan (CRCP) ...... 165 9.7 Principal Public Banks ...... 165 9.8 Media ...... 166 9.9 Main Advertising Agencies ...... 168 9.10 Consulting Firms ...... 170 9.11 Market Research Companies ...... 170 9.12 Obtaining Documents ...... 171 9.13 Transportation Companies with Services to Brazil ...... 171 9.14 Local Freight Forwarding Agents ...... 171 9.15 Shipping Lines / Cargo Supervision Firms ...... 171 9.16 Shipping Supervision and Oversight ...... 172 9.17 Operational Flow ...... 172 9.18 Other Useful Addresses ...... 173 9.19 Maps, Figures and Charts ...... 174 9.20 HDI Classification by District ...... 175 9.21 Major Traffic Flow by Airports between July 2015 - June 2016 ...... 180 9.22 Additional Information ...... 181 Bibliography ...... 185

iv How to Export - Pakistan

Index of Figures

Figure 1: Pakistan - Brazil on World Map ...... 2 Figure 2: Map - Pakistan in Asia ...... 2 Figure 3: Map of Pakistan ...... 3 Figure 4: Map of Major Industries in the Provinces of Pakistan ...... 3 Figure 5: Pakistan Topographic Map ...... 6 Figure 6: Average Monthly Rainfall and Temperature 1991-2015 ...... 8 Figure 7: A School in Northern Pakistan ...... 16 Figure 8: Human Development Indices at Regional, National and Provincial Level ...... 17 Figure 9: Parliament House of Pakistan ...... 19 Figure 10: Supreme Court of Pakistan ...... 20 Figure 11: Major Trade of Pakistan ...... 23 Figure 12: GDP Growth Rate, 2006-2016 ...... 26 Figure 13: Agriculture in Pakistan ...... 27 Figure 14: Sandak Mine Project, Balochistan, Pakistan ...... 29 Figure 15: A Spinning Mill in Faisalabad, Pakistan ...... 31 Figure 16: Pakistan - Electricity Generation Capacity Composition ...... 32 Figure 17: Pakistan Electricity Production ...... 33 Figure 18: Tarbela Dam, Pakistan ...... 34 Figure 19: Pakistan Foreign Exchange Reserves ...... 36 Figure 20: Import and Export Pie Charts ...... 49 Figure 21: Sports Goods of Sialkot, Pakistan ...... 52 Figure 22: Pakistan - Brazil Bilateral Trade ...... 54 Figure 23: Brazilian Exports ...... 69 Figure 24: Three Dimensional Bubble Chart - Growth of National Supply and International Demand for Products Exported by Brazil ...... 71 Figure 25: Main Industries in Pakistan by Region...... 75 Figure 26: Flow Chart of Anti-Dumping Investigation ...... 93 Figure 27: Port Qasim, Karachi, Pakistan ...... 101 Figure 28: Islamabad-Lahore Motorway, Pakistan ...... 118 Figure 29: A Typical View of Grand Trunk Road, Pakistan ...... 120 Figure 30: National Highways, Motorways and Strategic Road Maps ...... 121 Figure 31: China Pakistan Economic Corridor-Route Map...... 121 Figure 32: Major Projects along China-Pakistan Economic Corridor (CPEC) ...... 122 Figure 33: A View of a Train in Punjab, Pakistan ...... 123 Figure 34: Pakistan Railways Network Map ...... 125 Figure 35: Pakistan Water Ways Network ...... 126 Figure 36: Cargo Ships at Karachi Port, Pakistan ...... 129 Figure 37: Gawadar Port, Pakistan ...... 131 Figure 38: An Aircraft of Pakistan International Airlines ...... 133 Figure 39: Airports of Pakistan ...... 135 Figure 40: Pakistan Retail Sector Census - Retail Sector Snapshot ...... 138 Figure 41: A Random General Store in Pakistan ...... 141 Figure 42: Top 10 English Newspapers by Revenue ...... 142 Figure 43: Top 10 Urdu Publications ...... 143

v How to Export - Pakistan

Index of Tables

Table 1: Pakistan - Basic Country Information ...... 4 Table 2: Major Currencies and Rates ...... 5 Table 3: Exchange Rate of Pakistani Rupee Against Other Currencies (Yearly)...... 5 Table 4: Sectoral Contribution to the GDP Growth (% Points) ...... 5 Table 5: Pakistan's Neighboring Countries' Population and Statistics (2016/17) ...... 7 Table 6: Distances Between Neighbouring Countries' Capital Cities and Islamabad (Km) ...... 7 Table 7: Distances Between Major Cities of Pakistan (Km) ...... 7 Table 8: Climate of Provincial Capitals (Pakistan Metrological Department in year 2016) ...... 8 Table 9: Population by Province and Federal Territories ...... 9 Table 10: Active Population - Total and Distribution by Principal Economic Sectors (%) ...... 9 Table 11: Employment Share by Sector ...... 11 Table 12: Key Socio - Economic & Income Indicators (World Bank) ...... 12 Table 13: Economic Income Indicators (Ministry of Finance, Government of Pakistan) ...... 12 Table 14: South Asia Region Quintile Income Distribution ...... 13 Table 15: Consumption Trends ...... 13 Table 16: Type of Automobiles ...... 14 Table 17: Telecommunication Consumption Data ...... 14 Table 18: Literacy Rate in South Asia (2015) ...... 15 Table 19: Student Population...... 16 Table 20: Pakistan Human Development Index ...... 17 Table 21: Pakistan's HDI and Component Indicators for 2015 Relative to Selected Countries and Groups ...... 17 Table 22: Share of Capital Goods Imports ...... 25 Table 23: Unemployment Rate (2012-16) ...... 26 Table 24: Inflation Rate ...... 27 Table 25: Pakistani Exports (2015-17) ...... 28 Table 26: Pakistan Carbon Fuel Potential ...... 30 Table 27: Pakistan Coal Resources ...... 30 Table 28: Percent Growth of Selected Industrial Items ...... 32 Table 29: Energy Profile ...... 33 Table 30: Exchange Rate (2002-2017) ...... 35 Table 31: Foreign Exchange Reserves ...... 36 Table 32: Summary of Balance of Payments (2014-2017) (Million USD) ...... 37 Table 33: Liquid Foreign Exchange Reserves (Million USD) ...... 38 Table 34: IMF Reserve Position ...... 38 Table 35: Financial Position of Pakistan (Million USD) ...... 38 Table 36: National Budget for 2017-18 (Announced June 2017) ...... 39 Table 37: Government Debt Credit Rating ...... 41 Table 38: Current Share of Country's Trade at Global Level ...... 42 Table 39: Global Trade Over 5 Years ...... 42 Table 40: Merchandises Trade with the World (2012-16) ...... 43 Table 41: Pakistan's Trade with Different Trading / Regional Blocs (USD Thousand) ...... 43 Table 42: Imports and Exports Percentage of Gross Domestic Product ...... 44 Table 43: Structure of Exports (Million USD) ...... 44 Table 44: Major Exports (2010-16) (Million USD) ...... 45 Table 45: Structure of Imports ...... 46 Table 46: Pakistan - Brazil Bilateral Trade 2016 ...... 47 Table 47: Pakistan’s Export to Brazil - 2016 ...... 48

vi How to Export - Pakistan

Table 48: Balance of Trade, 2012-17 (State Bank of Pakistan) ...... 48 Table 49: Major Export Destination Markets (2014-17) ...... 48 Table 50: Major Import Markets (PKR and USD Billion and Percentage Shares) ...... 50 Table 51: Imports by Major Commodity Categories (2011-2016) (Million USD) ...... 51 Table 52: Exports by Major Commodity Groups – (Million USD) ...... 51 Table 53: Indicators for Brazilian Exports (Billion USD) ...... 53 Table 54: Comparison of Brazilian Imports from Pakistan with World ...... 53 Table 55: Comparison of Brazilian Exports to Pakistan and World ...... 54 Table 56: Pakistani Exports to Brazil: Nature of Products (Million USD)...... 55 Table 57: Pakistani Exports to Brazil: All Major Products (Million USD) ...... 55 Table 58: Bilateral Trade between Pakistan and Brazil – up to October 2017 ...... 55 Table 59: Brazilian Exports to Pakistan: Nature of Products (Million USD) ...... 56 Table 60: Brazilian Exports to Pakistan: All Major Products (Million USD) ...... 56 Table 61: Brazilian Trade with Pakistan ...... 56 Table 62: Brazilian Imports from Pakistan ...... 61 Table 63: Brazil’s Trade with the World – up to October 2017 ...... 67 Table 64: Brazilian Top 5 Trade Partners ...... 67 Table 65: Brazilian Exports and Imports of Product Groups in 2016 ...... 67 Table 66: Brazilian Exports to the World in 2016 ...... 67 Table 67: Brazilian Imports to the World in 2016 ...... 68 Table 68: Top 5 Products Exports - Imports at HS 6 Digit Level - 2016 ...... 68 Table 69: Brazilian Trade in 2016 ...... 69 Table 70: Brazilian Exports to Major Regions in 2016 ...... 70 Table 71: Brazilian Imports from Major Regions in 2016 ...... 70 Table 72: Pakistani Exports to Major Regions in 2016 ...... 70 Table 73: Pakistani Imports from Major Regions in 2016 ...... 70 Table 74: Documentation Required at the Destination of Imports ...... 99 Table 75: Permanent and Temporary Tax Examples - Brazil ...... 116 Table 76: Estimated Length of Roads in Provinces (Km) ...... 119 Table 77: Passenger and Freight Traffic ...... 123 Table 78: Domestic and International Railway Routes ...... 124 Table 79: Port of Karachi Capacity ...... 127 Table 80: Cargo, Container Handling & Ship Movement at KPT (2016-17) ...... 127 Table 81: Cargo Handling at Karachi Port Trust in Thousand Tonnes (000 Tonnes) ...... 129 Table 82: Cargo Handling at Port Qasim in Thousand Tonnes (000 Tonnes) ...... 130 Table 83: Goods Handling ...... 130 Table 84: Gwadar Port Trust Capacity in Thousand Tonnes (000 Tonnes) ...... 132 Table 85: Current Port Facilities at Gwadar Port ...... 132 Table 86: Overall Performance of PIA ...... 133 Table 87: List of International Airports in Pakistan ...... 134 Table 88: FMCG Channels and Contribution ...... 139 Table 89: Telecommunications Sector (Contributions) ...... 139 Table 90: Nature of Retail Businesses and Numbers ...... 140

vii How to Export - Pakistan

List of Acronyms

AJK Azad Jammu & Kashmir ALADI Asociacion Latinoamericana de Integracion (The Latin-American Integration Area) ALALC Asociación Latinoamericana de Libre Comercio (Latin-American Free Trade Association) ANP Agencia Nacional de Petroleo (Brazilian Oil Agency) AOV Average Order Value ARPC Agreement on Reciprocal Payments and Credits AVG Average BCI Business Confidence Index BIT Business International Trade BMI Business Monitor International BOI Board of Investment BOT Build, Operate & Transfer BPCCI Brazil-Pakistan Chamber of Commerce and Industry BRICS Brazil, Russia, India, China and South Africa BSC Banking Services Corporation C3 Command, Control and Communication CAA Civil Aviation Authority CARs Central Asian Republics CCP Competition Commission of Pakistan CCTV Closed-circuit Television CD Compact Disc CEO Chief Executive Officer CET Common External Tariff CIF Cost Insurance and Freight COD Cash on Delivery COPHCL China Overseas Ports Holding Company Ltd. CPEC China Pakistan Economic Corridor CPI Consumer Price Index CPPA Central Power Purchase Agency CSD Canteen Stores Department (Pakistan) DAC Development Assistance Committee DFIs Development Financial Institutions DMOs District Mail Offices ECA Export Credit Agency ECC Economic Coordination Committee EFD External Financial Dependence EFR Export Refinancing Facility EHP Early Harvest Projects EPA Environmental Protection Agency EPZ Export Processing Zones ETO Electronic Transactions Ordinance EU European Union EUR Euro

viii How to Export - Pakistan

FATA Federally Administered Tribal Areas FBR Federal Board of Revenue FDI Foreign Direct Investment FMCG Fast Moving Consumer Goods FOB Free on Board FPCCI Federation of Pakistan Chambers of Commerce and Industry FPI Foreign Portfolio Investment FX Foreign Exchange FY Fiscal Year FZ Free Zone GATT General Agreement on Tariffs and Trade GBP Great Britain Pound GDP Gross Domestic Product GHS Globally Harmonized System GMP Good Manufacturing Practice Gms Grams GNI Gross National Income GOP Government of Pakistan GOSF Great Online Shopping Festival GPA Gwadar Port Authority GPOs General Post Offices GSP Generalized System of Preferences GST Goods and Services Tax HDI Human Development Index HS Harmonized System IAEA International Atomic Energy Agency IBRD International Bank for Reconstruction and Development ICAO International Civil Aviation Organization ICC International Chamber of Commerce ICMS Integrated Customer Management System ICT Islamabad Capital Territory ICT Information and Communications Technology IDA International Development Association IDB Islamic Development Bank IFAD International Fund for Agricultural Development IFC International Finance Corporation ILO International Labour Organization IMF International Monetary Fund IMO International Maritime Organization IMSO International Mobile Satellite Organization Interpol International Criminal Police Organization IP Intellectual Property IPP Independent Power Producer IPPA Investment Promotion and Protection Agreement IPPs Independent Power Projects IPI Industrialized Product Tax IPU Inter-Parliamentary Union

ix How to Export - Pakistan

ISO International Standards Organization IT Information Technology ITO Income Tax Ordinance ITSO International Telecommunications Satellite Organization ITU International Telecommunication Union ITUC International Trade Union Confederation ITC International Trade Centre IWTDC Inland Water Transport Development Company KESC Karachi Electric Supply Company Ltd. KG Kilogram KICT Karachi International Container Terminal Km Kilometre KP Khyber Pakhtunkhwa KPT Karachi Port Trust LC Letter of Credit LNG Liquefied Natural Gas LoC Line of Control LSM Large Scale Manufacturing LTE Long Term Evolution LTFF Long Term Financing Facility MFN Most Favored Nation MIGA Multilateral Investment Guarantee Agency MINFAL Ministry of Food Agriculture and Livestock ML Millilitre MOI Ministry of Interior MSCI Morgan Stanley Capital International MT Modern Trade MW Megawatt MXP Mexican Peso NCM Mercosur Common Nomenclature NHA National Highway Authority NIBAF National Institute of Banking and Finance NLC National Logistics Cell NOC No Objection Certificate NTC National Tariff Commission NTRC National Transport Research Centre OBOR One Belt One Road OECD Organization for Economic Co-operation and Development OIC Organization of Islamic Cooperation OLX Online Exchange OPCW Organization for the Prohibition of Chemical Weapons OPEC Organization of Petroleum Exporting Countries PAEC Pakistan Atomic Energy Commission PASEP Social Integration Programs PBC Pakistan Business Council PCT Pakistan Customs Tariff PIA Pakistan International Airline

x How to Export - Pakistan

PIB Pakistan Infrastructure Bank PICT Pakistan International Container Terminal PKR Pakistani Rupees PNSC Pakistan National Shipping Corporation PPIB Private Power and Infrastructure Board PPP Purchasing Power Parity PPP Public Private Partnership PRGT Poverty Reduction and Growth Trust PSM Pakistan Steel Mill PSLM Pakistan Social and Living Standard Measurement PTA Pakistan Telecommunication Authority PTCL Pakistan Telecommunication Limited QICT Qasim International Container Terminal RCD Regional Cooperation for Development RO Representative Office S & P Standard & Poor’s SAARC South Asian Association for Regional Cooperation SACEP South Asia Co-operative Environment Program SAFTA South Asia Free Trade Agreement SBP State Bank of Pakistan SCO Shanghai Cooperation Organization SDR The Special Drawing Right SECP Securities and Exchange Commission of Pakistan SEZs Special Economic Zones SFLF Salman Farooq Legal and Financial Consultants SISCOMEX Integrated Foreign Trade System SMEDA Small and Medium Enterprises Development Authority SMEs Small and Medium Enterprises SPDC Social Policy and Development Centre STPF Strategic Trade Policy Framework TEU Twenty-Foot Equivalent Unit TIFA Trade & Investment Framework Agreement TNT Trade Network Tracking TPPL Total Parco Pakistan Limited UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNIDO United Nations Industrial Development Organization UNWTO World Tourism Organization UPU Universal Postal Union USD United States Dollar VAT Value Added Tax WAPDA Water and Power Development Authority WCL World Confederation of Labour WCO World Customs Organization WFTU World Federation of Trade Unions WIPO World Intellectual Property Organization WTO World Trade Organization

xi How to Export - Pakistan

1. INTRODUCTION

The Islamic Republic of Pakistan is a federal parliamentary republic in South Asia. It is the sixth most populous country in the world, with a population exceeding 200 million people. In terms of geographical coverage, it is the 36th largest country in the world, covering 796,095 square kilometers. Pakistan has a 1,046 kilometers (650 miles) long coastline along the Arabian Sea and the Gulf of Oman in the south. It is bordered by India to the east, Afghanistan to the west, Iran to the southwest and China to the far northeast. It is separated from Tajikistan by Afghanistan's narrow Wakhan Corridor in the north, and also shares a maritime border with Oman. Pakistan is strategically placed as it straddles the Middle East, Central Asia and South Asia.

Initially a Dominion, Pakistan adopted a Constitution in 1956. An internal conflict in 1971 resulted in the secession of East Pakistan as the new country of Bangladesh. In 1973, Pakistan adopted a new Constitution, which established a Federal Government based in Islamabad alongside its pre-existing Parliamentary Republic status – which consists of four provinces and four federal territories.

With around a 207 million population and a booming youth as well as surging international investment, particularly from China, Pakistan offers a strategic prospect for investors. Pakistan is in Next 11 (N-11), a group of countries identified by the World Bank as having high potential of becoming, along with the BRICS countries, among the world's largest economies in the 21st century.

Pakistan has generally been open to foreign investors and has offered incentives for investors. However, a coherent and comprehensive foreign investment-focused trade and economic policy is yet to arrive. Lately, Pakistan has announced a proposition for foreign investors under its China Pakistan Economic Corridor (CPEC) initiative, where it is establishing tax-free heavens for improving its productivity and exports. These are in Karachi, Gwadar and other cities in Punjab and Khyber Pakhtoonkhwa (KP).

Brazil and Pakistan have cordial international political relations and have supported each other in the political arenas at different forums. While, geographically, they are distant, there is a huge potential to increase bilateral trade from the current status, which is nominal. This can be bridged to enhance the trade level by the mutual collaboration of Government and corporate actors.

Although Pakistan has long suffered from terrorist attacks, the safety situation is at present under control and the general security situation has drastically improved. This has led to an improved business environment and foreign companies normally have no reason for concern.

1 How to Export - Pakistan

Maps

Figure 1: Pakistan - Brazil on World Map

Figure 2: Map - Pakistan in Asia

2 How to Export - Pakistan

Figure 3: Map of Pakistan

Figure 4: Map of Major Industries in the Provinces of Pakistan

3 How to Export - Pakistan

1.1 Basic Information

 The population of Pakistanis estimated to be 207.8 million as of May 20171. This result does not yet reflect the population of Azad Jammu & Kashmir (AJK) and Gilgit Baltistan (GB) due to on-going census process.  Pakistan’s population is equivalent to 2.62% of the total world population.  Pakistan ranks number 6 in the list of countries by population.  The total land area is 796,095 square kilometres.  In May 2017, around 77,107,125 persons or 39.2 % of the population lived in urban areas. The remainder 60.8% lives in rural areas.  The national language is Urdu, which is understood across the country. Provincial and regional languages include Sindhi, Punjabi, Pashto, Balochi and around 70 more languages. English is used as the official language and is understood in the majority of the urban centres.  By religious distribution, Muslims constitute around 97% (Sunni 77%, Shi'a 20%), Christians, Hindus, and others around 3% of the total population.  To access a telephone number, the country code is 0092.  Pakistani currency is called Rupee and is represented generally by PKR.

Table 1: Pakistan - Basic Country Information Indicators2 Year Surface Area (sq. km.) 796,095 Capital City Islamabad Capital City Population 2017 2,006,572 Population Growth Rate (Average Annual %) 1998-2017 2.4 Population Density (Inhabitants/km2) 2014 240 Life Expectancy at Birth (Females/Males, Years) 2010-2015 66.8/65 Adult Literacy (Both genders)3 2015 56% Population below Poverty Line4 2013 29.5% Inflation Rate 2016 3.8% per Annum Human Development Index 2015 0.550 Gross Domestic Product5 2016 USD 283,659,980 GDP per Capita6 2016 USD 1,468 GDP Growth Rate7 2016 5.7 Unemployment Rate (% of Total Labor Force) 2016 5.9% (Modeled ILO Estimate)8 Individuals using the Internet (%) 2014 13.8 Energy Production, Primary (Petajoules) 2013 2009 Energy Supply per Capita (Gigajoules) 2013 16

1 Pakistan Census, Pakistan Bureau of Statistics, 2017(Census, 2017) 2http://data.un.org/CountryProfile.aspx?crName=PAKISTAN (Division U. N., 2017) 3http://data.worldbank.org/indicator/SE.ADT.LITR.ZS?locations=PK (UNESCO, 2017) 4http://data.worldbank.org/indicator/SI.POV.NAHC?locations=PK (Bank T. W., World Bank , 2017) 5http://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=PK (Bank W. , World Bank Data, 2017) 6http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=PK (Bank W. , data.worldbank, 2017) 7http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=PK (Bank W. , The World Bank, 2017) 8http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?locations=PK (Bank W. , The World Bank, 2017)

4 How to Export - Pakistan

Table 2: Major Currencies and Rates Currency9 Symbol Buying Selling U.S. Dollar USD or US $ 105.3 105.5 Euro EUR 122.6 122.8 British Pound GBP 139.1 139.4

Table 3: Exchange Rate of Pakistani Rupee Against Other Currencies (Yearly) Currency 2013 2014 2015 2016 2017 USD 98.9 98.6 101.6 104.5 104.9 GBP 150.2 169.2 158.7 138.7 135.8 EUR 129.5 135 112.5 116.2 119.2

Table 4: Sectoral Contribution to the GDP Growth (% Points) Sector 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-17 P 10 11 12 13 14 15 16 Agriculture 0.05 0.43 0.79 0.57 0.53 0.45 0.06 0.69 Industry 0.71 0.95 0.54 0.13 0.92 1.06 1.21 1.05 Manufacturing 0.19 0.34 0.28 0.61 0.76 0.53 0.5 0.71 Services 1.81 2.24 2.51 2.95 2.6 2.55 3.25 3.54 Real GDP (Fc) 2.58 3.62 3.84 3.65 4.05 4.06 4.51 5.28 Source: Pakistan Bureau of Statistics

Sector Contribution in GDP

Agriculture: PKR 2,206,357 Million10 Industry: PKR 1,513,752 Million Services: PKR 6,584,437 Million Others: PKR 2,098,443 Million

 GDP (current prices, forecast for current year): USD 246 Billion11  GDP growth (last 5 years): . 2012 3.84% . 2013 3.68 % . 2014 4.05 % . 2015 4.04 % . 2016 5.71 %

Pakistan-Brazil Bilateral Trade Volume12

Bilateral Trade in 2016: Pakistan exports to Brazil: USD 49.9 million Pakistan Imports from Brazil: USD 341 million

9 Rates acquired from open market for October 30, 2017. Bank rates may vary, for which website of State Bank of Pakistan can be accessed. 10Ministry of Finance, Government of Pakistan, 2016 (Ministry of Finance, Ministry of Finance) 11International Monetary Fund (IMF) Data (Fund, IMF Data) 12Source: http://www.pbs.gov.pk (Statistics, Pakistan Bureau of Statistics)

5 How to Export - Pakistan

Bilateral Trade (forecast current year 2017-18): Brazilian Exports to Pakistan: USD 452.6 million Brazilian Imports from Pakistan: USD 97.3 million

1.2 General Characteristics

Figure 5: Pakistan Topographic Map

1.2.1 Geography

Pakistan shares an estimated 800 kilometers boundary with Iran. Running along the Hindu Kush and Pamir mountains, it shares a 2,250 kilometers boundary with Afghanistan called the “Durand Line”. From the eastern end of the Afghanistan- Pakistan border, a boundary of approximately 520 kilometers runs southeast between China and Pakistan, ending near the Karakoram Pass. The Pakistan-India cease-fire line (i.e. Line of Control or LoC) runs from the Karakoram Pass west- southwest to a point about 130 kilometers northeast of Lahore. The LoC is about 770 kilometers long and was arranged with United Nations (UN) assistance at the end of the Indo-Pakistani War of 1947-48.13

13 Statistics from Survey of Pakistan, Government of Pakistan (Statistics, Pakistan Bureau of Statistics)

6 How to Export - Pakistan

1.2.2 Distances

The following table provides information about the neighboring countries of Pakistan including distances and other basic country information.14

Table 5: Pakistan's Neighboring Countries' Population and Statistics (2016/17) Parameter Pakistan India China Iran Afghanistan Population 207 1,324.17 1,378.66 80.2 34.6 (Million) Per Capita Income 1,510 1,680 8,260 6,530 580 USD (2016) Area, Sq.km. 796,095 3,287,259 9,562,911 1,745,150 652,860

The following tables summarize information on: (i) Table No.6: Distances between Islamabad and the capital cities of its neighboring countries. (ii) Table No. 7: Distances between the major cities of Pakistan

Table 6: Distances Between Neighbouring Countries' Capital Cities and Islamabad (Km) New Delhi (India) 676 Beijing (China) 3,875 Kabul (Afghanistan) 477.7 Tehran (Iran) 2,494.3

Table 7: Distances Between Major Cities of Pakistan (Km)

Faisalabad

Faisalabad 0 Gwadar

Gwadar 1,797 0 Gujranwala

Gujranwala 170 1,919 0 Hyderabad

Hyderabad 1,029 741 1,192 0 Islamabad

Islamabad 330 2,010 224 1,353 0 Karachi Lahore Karachi 1,179 623 1,342 162 1,503 0

Lahore 186 1,850 73 1,629 383 1,234 0 Multan

Multan 249 1,540 418 780 564 924 348 0 Muzaffarabad

Muzaffarabad 445 2,126 339 1,460 120 1,599 500 680 0 Peshawar

Peshawar 458 1,928 398 1,210 187 1,354 512 692 303 0 Quetta

Quetta 808 1,097 965 402 912 691 979 587 1,028 841 0 Sialkot Sialkot 267 1,972 54 1,211 231 1,356 125 460 346 405 1,020 0

14Source: World Bank14 (Bank W. , World Bank)

7 How to Export - Pakistan

1.2.3 Climate

Pakistan lies in a moderate temperate zone characterized by all four seasons of spring, summer, autumn and winter. However, distinct differences exist among locations. For example, the Arabian Sea coastal area is generally warm, whereas the frozen snow-covered ridges of Gilgit Baltistan and Azad Jammu & Kashmir are cold most of the year.

The most populated city, Karachi (a coastal city), is generally warm and humid and has less rainfall i.e. only in July and August the average is more than twenty-five millimetres of rain in the Karachi area; the remaining months are exceedingly dry. The temperature is also more uniform in Karachi than in Islamabad, ranging from an average daily low of 13° C during winter to an average daily high of 34° C in summer days.

Compared to Karachi, the cities of Lahore, Peshawar and Islamabad have comparatively similar climate and rainfall, with slight variance, with Islamabad receiving the highest rainfall within these three. In winter, all of these three have low temperatures touching as low as -1o C or below. In summer, the temperatures rise to as high as 45o C. Due to monsoons in late summer (July-August), the temperatures falls to around 35o C, however humidity increases.

Figure 6: Average Monthly Rainfall and Temperature 1991-2015

Table 8: Climate of Provincial Capitals (Pakistan Metrological Department in year 2016) Temperature (Celsius) Annual Rainfall (Millimeters) Cities Max Min Average Total Lahore 39 6 24 628 Karachi 35 12 27 217 Peshawar 39 5 23 403 Islamabad 38 4 22 1,142 Quetta 37 -2 18 261

8 How to Export - Pakistan

1.2.4 Population, Urban Centres and Social Indicators

With the data of recent census just published, Pakistan has a population of 207.8 million, making it the world's sixth most populous country. During 1990–2003, Pakistan sustained its historical lead as the second most urbanized nation in South Asia with city dwellers comprising 36% of its population. Pakistan is a multicultural and multi-ethnic society and hosts one of the largest refugee populations in the world i.e. Afghan refugees, which reached 4 million in 2004.

A startling feature of Pakistan’s population is a high percentage of young people with a median age of just 22.7 years. In Pakistan, 60.4 percent of the population is between the ages of 15 to 64 years. This dominant working age segment of the population can play a very significant role in the economic growth and development of the country15. The current estimated population by provinces has been presented below.

Table 9: Population by Province and Federal Territories Province / Area Per 1998 Census Current Estimate16 Punjab 73.62 million 110.0 million Sindh 30.44 million 47.88 million Khyber Pakhtunkhwa 17.74 million 30.52 million Baluchistan 6.57 million 12.34 million Islamabad Capital Territory 0.81 million 2.04 million Federally Administered Tribal Areas 3.18 million 5.00 million Total 132.36 million 207.77 million

Composition by sex and principal economic indicators are presented below:

Table 10: Active Population - Total and Distribution by Principal Economic Sectors (%)17 2001- 2003- 2005- 2006- 2007- 2008- 2009- 2010- 2012- Indicators 02 04 06 07 08 09 10 11 13 Labour force participation rate Both sexes 50.5 50.7 53.0 52.5 52.5 53.1 53.5 53.4 53.1 Male 82.7 82.7 84.0 831.0 82.4 82.0 81.7 81.9 81.1 Female 16.2 18.0 21.1 21.3 21.8 23.1 24.1 24.4 24.3 Employment – to – population ration Both sexes 46.5 47.0 49.7 49.8 49.9 50.3 50.7 50.4 49.9 Male 77.6 77.6 79.6 79.6 79.1 78.5 78.3 78.0 77.0 Female 13.6 15.6 19.0 19.4 19.9 21.0 21.9 22.2 22.1 Unemployment rate Both sexes 7.8 7.4 6.1 5.1 5.0 5.2 5.3 5.7 6.0 Male 6.2 6.2 5.2 4.2 4.0 4.2 4.1 4.8 5.1

15 (Statistics, Pakistan Bureau of Statistics) 16Provisional Results from Pakistan Census, 2017, Pakistan Bureau of Statistics, Government of Pakistan 17Results for such details are yet to arrive from the Pakistan Census and hence previous data has been used.

9 How to Export - Pakistan

Table 10: Active Population - Total and Distribution by Principal Economic Sectors (%)17 2001- 2003- 2005- 2006- 2007- 2008- 2009- 2010- 2012- Indicators 02 04 06 07 08 09 10 11 13 Female 16.4 12.9 9.6 8.6 8.7 9.0 9.2 9.0 9.1 Share of industry in total Employment Both sexes 21.0 20.6 21.2 21.4 20.6 21.0 21.4 21.8 22.8 Male 22.0 21.7 22.7 23.5 22.7 23.1 24.1 24.6 26.2 Female 14.8 14.9 15.1 12.6 12.2 12.7 11.6 11.5 11.3 Share of agriculture in total Employment Both sexes 41.1 41.8 41.6 42.0 42.8 43.3 43.4 43.5 42.2 Male 37.2 37.0 35.6 35.0 35.2 35.7 35.2 34.9 33.1 Female 64.5 66.6 67.7 71.4 73.8 72.7 73.9 74.2 74.9 Share of services in total Employment Both sexes 38.0 37.6 37.1 36.6 36.6 35.7 35.2 34.7 35.0 Male 40.8 41.3 41.8 41.5 42.2 41.2 40.7 40.5 40.7 Female 20.7 18.4 17.3 16.0 13.9 14.6 14.5 14.2 13.8 Share of wage and salaried workers in total Employment Both sexes 40.4 38.5 38.4 38.3 37.1 36.8 36.5 36.9 39.7 Male 40.9 39.8 41.2 41.5 40.6 40.5 40.7 41.2 43.8 Female 37.1 31.5 26.6 25.1 22.9 22.6 20.8 21.6 24.9 Share of own account workers in total Employment Both sexes 39.9 38.6 36.8 36.0 35.9 34.8 35.6 36.3 34.9 Male 43.7 42.9 41.5 41.1 41.2 40.1 41.3 41.8 41.1 Female 16.5 170.0 16.2 14.3 13.9 14.0 14.5 16.6 15.9 Share of Employment in the informal economy Both sexes 63.8 69.4 72.3 71.5 72.4 73.0 72.9 73.5 73.3 Male 64.1 69.9 72.2 71.6 72.4 73.1 73.0 73.9 73.6 Female 60.8 64.5 73.1 69.9 71.7 71.6 72.7 70.6 70.9 Share of Employment working 50 hours or more Both sexes 40.7 42.7 41.0 40.0 39.3 38.0 39.5 38.5 363.0 Male 45.2 48.9 48.3 47.8 47.0 46.3 48.0 469.0 44.4 Female 13.4 11.6 9.4 7.7 7.6 6.0 7.8 8.4 7.3 Share of Employment in agriculture working 50 hours or more* Both sexes 38.2 38.3 33.0 29.3 28.5 26.6 28.7 28.6 24.3 Male 45.0 47.8 44.0 40.4 40.0 38.5 41.3 41.1 36.0 Female 14.3 11.3 8.3 6.4 6.1 4.0 6.4 7.7 5.9 Share of Employment in trading working 50 hours or more* Both sexes 62.8 69.4 68.4 70.3 69.5 68.8 70.1 67.7 67.1 Male 63.5 70.3 69.3 71.5 705.0 69.5 71.1 68.4 67.8 Female 260.0 22.2 388.0 30.0 32.6 32.9 35.7 35.3 38.2 Source: Pakistan Bureau of Statistics, 2015, Pakistan Labour Force Survey: *Share has been calculated from respective sector

10 How to Export - Pakistan

Table 11: Employment Share by Sector 2012-13 2013-14 2014-15 Major Sectors Total Male Female Total Male Female Total Male Female Agriculture/ forestry/ hunting 43.7 34.5 75.7 43.5 34.2 74.0 42.3 33.1 727.0 and fishing Manufacturing 14.1 15.0 10.7 14.2 14.7 12.3 15.3 15.7 14.1 Construction 7.1 9.5 0.2 7.3 9.5 0.3 7.3 9.5 0.2 Wholesale & retail 14.4 18.1 1.5 14.6 18.5 1.6 14.6 18.7 1.4 trade Transport/ storage 5.5 7.0 0.2 5.5 7.1 0.2 5.4 7.0 0.1 & communication Community/social 13.3 13.9 11.5 13.1 13.7 11.5 13.2 13.7 11.3 & personal service *Others 1.6 2.0 0.2 1.8 2.3 0.1 1.9 2.3 0.2 Source: Pakistan Bureau of Statistics (Pakistan Labour Force Survey 2014-15). *: Others (Includes mining & quarrying, electricity, gas, financing, insurance, real estate & business services and extra territorial organizations and bodies

1.2.5 Major Urban Centres

The major cities of Pakistan and their respective economic, social and trade related strengths to investors are:

 Karachi (major ports, industrial and financial hub)  Lahore (capital of Punjab, cultural city, industrial)  Islamabad (federal capital territory, Government offices)  Peshawar (Provincial capital of Khyber Pakhtoonkhwa, rich history, industries, trade route to Afghanistan)  Quetta (capital of Baluchistan, rich history, fruits, trade route to Afghanistan)  Faisalabad (textile industry)  Sialkot (sports goods, sportswear and surgical equipment industry)  Gujranwala (commercial and industrial hub)  Gwadar (port city, gaining importance due to China Pakistan Economic Corridor)  Hyderabad (industrial city, rich history)  Multan (historical city, textile industry)  Muzaffarabad (capital of Azad Jammu and Kashmir)

1.2.6 Key Socioeconomic Indicators

Income Indicators

The following tables summarize information related to income indicators as recorded by the relevant international and national authorities:

11 How to Export - Pakistan

Table 12: Key Socio - Economic & Income Indicators (World Bank) Indicator Year Value Gross Domestic Product (GDP in USD) 2016 283.568 billion GDP Per Capita (Current USD) 2016 1,468 Gross Savings (USD) 2015 63.131 billion Final Consumption Expenditure 2016 260.732 billion Household final consumption expenditure (USD)18 2016 227.125 billion People Living Below National Poverty Line 2016 29.5% Male: 28,353,912 Children out of School 2014 Female: 31,721,944 Primary completion rate 2015 72% Net enrolment rate 2015 58% Adult literacy rate (15+) 2015 56% Fertility Rate (Births per woman) 2015 3.5 Life Expectancy (Years) 2016 66 Health Expenditure, total (Percent of GDP) 2014 2.6

Table 13: Economic Income Indicators (Ministry of Finance, Government of Pakistan) Indicator: Base Year 1999-2000 2012-13 2013-14 2014-15 2015-16 2016-17 Growth Rate (at constant FC %) GDP Growth Rate 3.7 4.1 4.1 4.5 5.3 Agriculture 2.7 2.5 2.1 0.3 3.5 Manufacturing 4.9 5.7 3.9 3.7 5.3 Commodity Producing Sector 1.7 3.5 3.6 3.0 4.3 Services Sector 5.1 4.5 4.4 5.6 6.0 Growth Rate (at current MP %) Total Investment 10.8 10.0 17.0 5.0 11.1 Fixed Investment 10.7 9.7 18.0 4.9 11.2 Public Investment 4.9 1.2 29.0 7.3 23.6 Private Investment (as % of total 12.9 12.8 14.5 4.0 6.6 investment) National Savings 92.8 91.3 93.6 92.2 82.9 Foreign Savings (as % of GDP 7.2 8.7 6.4 7.8 17.1 current MP) Total Investment 15.0 14.6 15.7 15.6 15.8 Fixed Investment 13.4 13.0 14.1 14.0 14.2 Public Investment 3.5 3.2 3.7 3.8 4.3 Private Investment 9.8 9.9 10.4 10.2 9.9 National Savings 13.9 13.4 14.7 14.3 13.1 Foreign Savings 1.1 1.3 1.0 1.2 2.7 Domestic Savings 8.7 7.7 8.6 8.2 7.5 Per Capita Income (MP-USD) 1333.7 1388.8 1514.0 1530.8 1628.8 Consumer Price Index Growth % 7.4 8.6 4.5 2.9 4.1 Stock Exchange Growth % Karachi Stock Exchange 100 Index 52.2 41.2 16.0 9.8 27.5 Aggregate Market Capitalization 47.6 36.2 5.7 2.3 26.4

18 (The World Bank, Pakistan National Socioeconomic Indicators, 2016)

12 How to Export - Pakistan

Income Distribution: Regional Principal Income Levels by Population Segment

Given below is the South Asian Income Distribution amongst the quintiles ranging from poorest 20% to richest 20%of South Asia19:

Table 14: South Asia Region Quintile Income Distribution Poorest 20% Next 20% Next 20% Next 20% Richest 20% Country First Second Third Fourth Fifth Quintile Quintile Quintile Quintile Quintile Pakistan 9.4 12.8 16.1 21.0 40.7 India 8.3 11.9 15.3 20.6 44.0 Bangladesh 8.9 12.5 16.0 21.2 41.5 Sri Lanka 7.1 10.8 14.5 20.5 47.0 Nepal 8.3 12.1 16.2 21.9 41.5

As compared to the other countries of South Asia, Pakistan appears to be relatively better placed in income distribution across its population quintiles. The highest income earning strata has the lowest percentage of income while the two lowest quintiles have the highest income percentages.

Key Wage Levels

The legal minimum wage for unskilled labor is PKR 14,000 per month (USD 145 per month). However, unskilled workers in the predominantly agricultural rural areas are paid almost 50% of this amount.20

 The low income group comprises persons earning up to PKR. 25,000 per month (USD 240 per month).  While the median wage in urban centers is PKR. 45,000 per month (USD 432 per month), the middle-income group comprises persons earning between PKR. 25,000 to PKR. 100,000 per month (USD 240 – 960 per month).  Persons earning between PKR. 100,000 to PKR. 300,000 per month (USD 960 – 2,780 per month) are categorized as an above average earning group.  Persons earning over PKR. 300,000 per month (USD 2,780 per month) are classified as the high income group.

Other Indicators

Additional important indicators have been presented below.

Table 15: Consumption Trends Number of radio receivers per 1000 of population in 2017 93.4 per 1000 Number of television sets per 1000 of population in 2017 31.2 per 1000 Average television viewing time per viewer 2.17 hours per day

19Source: Poverty & Equity Databank of World Bank (Bank T. W., Poverty & Equity Data) 20Source: pbs.gov.pk (Pakistan Bureau of Statistics)

13 How to Export - Pakistan

Table 15: Consumption Trends Number of landlines 23 per 1000 Mobile sets per 1000 of population in 2017 709 per 1000 Number of computers per 1000 of population 169 per 1000 Number of internet users per 100 of population in 2017 21% Average internet use time per user 3.2 hours per day Number of cities with WIFI (digital inclusion) All cities and towns Steel consumption – tonnes /inhabitant 0.0052 per person Electric power consumption/inhabitant 8.52 KWh

Data for production of different types of vehicles in Pakistan taken from reports of Pakistan Automobile Manufacturers Association is given below:

Table 16: Type of Automobiles 2013/14 2014/15 2015/16 2016/17 Passenger Cars 16,071 34,301 52,531 159,826 Trucks 2,033 2,385 4,478 6,235 Buses 544 611 866 961 Jeeps / 4WD 1,217 602 671 1,024 Pick Ups / Vans 17,477 24,115 31,518 20,559 Farm Tractors 34,521 32,548 26,615 44,303 Motor Cycles 71,507 911,445 1,119,689 1,348,537 Total All Vehicles 943,370 1,106,007 1,336,368 1,581,445 Growth: % YOY basis -0.11% 17.24% 20.83% 18.34% Vehicles Produced per 1000 of 5.17 5.94 7.04 8.17 population

The above figures represent only the production of vehicles in Pakistan. Since Pakistan still imports a fairly large number of vehicles in fully made up form, the actual sales of vehicles per 1,000 per year are considerably larger than the figures shown in the last row of the above table.

According to the Pakistan Economic Survey Report 2016-1721, the following table displays the trends in telephone, mobile and internet usage.

Table 17: Telecommunication Consumption Data Financial Year Telephones Broadband Connections Mobile Phones (FLL &WLL) (3G, 4G & Fixed) 2013-14 5,217,046 3,795,923 139,974,754 2014-15 3,930,596 16,885,518 114,658,434 2015-16 3,264,883 32,295,286 133,241,465 2016-17 (July-March) 3,067,911 42,369,872 139,108,964 Ministry of Information Technology and Telecommunication

Telecommunications is a highly lucrative sector in Pakistan, therefore the Government offers the following incentives to investors in the IT industry:

21 (Ministry of Finance, Pakistan Economic Survey 2016-17, 2016-17)

14 How to Export - Pakistan

 Zero income tax on IT exports until June 2019  100 percent equity ownership facilitated for foreign investors  100 percent repatriation of capital and dividends allowed  7 year tax holiday for venture capital funds

Consumer Profile and Changes in Consumer Behavior

With steady growth in per capita income, the middle two quintiles of income have grown over the past few years in terms of income distribution as per statistics released by the Equality and Poverty databank of World Bank. Migration trends from rural to urban centers persist. People in urban centers now have higher incomes and exhibit higher purchasing power. While small shops still form a very large percentage of the total retail trade, recent years have seen the following remarkable trends:

i. The number of middlemen is shrinking, particularly for manufactured goods. Many industrial companies (mainly textiles) making consumer goods are establishing their own or franchised distribution/retail centers, thereby effectively eliminating the wholesalers or similar middlemen. They also attempt to win customer loyalty through various techniques like loyalty cards and direct marketing. This trend is likely to continue to grow. ii. Larger malls and superstores are becoming popular in urban areas. Previously confined only to cities like Karachi and Lahore, malls are now emerging in other cities including but not limited to Islamabad, Faisalabad, Peshawar, Sialkot, Multan, Muzaffarabad and Rawalpindi. With an increasing trend of more families with both partners working, the preference for ready-made garments and pre-cooked foods is growing rapidly.

Literacy Rates

The following table provides a comparison of literacy rates among Pakistan’s neighboring countries:

Table 18: Literacy Rate in South Asia (2015) Pakistan Afghanistan Iran India Bangladesh China Male 68.9 52.0 91.0 80.9 64.6 98.2 Female 43.0 24.2 82.5 62.8 58.5 94.5 Overall 56.0 38.2 86.8 72.1 61.5 96.4

Statistics above show that Pakistan lags behind all its neighbors with the exception of Afghanistan. The Government is addressing this challenge by facilitating the establishment of new schools and colleges. The number of universities has risen sharply and certain provincial Governments have declared primary education free and mandatory.

15 How to Export - Pakistan

Figure 7: A School in Northern Pakistan

Student Population

The following table summarizes information on mainstream institutions, enrolment and teachers by educational level22 (Thousands)

Table 19: Student Population Enrolment Institutions Teachers Year 2015- 2016- 2015- 2015- 2016- 2014- 2015- 2016- 2014-15 16(P) 17 (E) 15 16 (P) 17 (E) 15 16(P) 17 (E) Pre-Primary 9,589 9,791 9,976 ------Primary* 19,846 21,550 22,330 165 164 167 430 444 453 Middle 6,582 6,922 7,087 44 45 46 380 394 404 High 3,500 3,652 3,865 31 31 32 514 529 539 Higher Sec./Inter 1,665 1,698 1,911 5 5 5 118 123 122 Degree Colleges 1,144 937 1,058 1 1 1 36 37 42 Technical & 319 315 317 3 3 3 19 18 18 Vocational Institutes Universities 1,299 1,355 1,287 0.2 0.2 0.2 88 8 85 Total 43,944 46,220 47,831 249 249 254 1,585 1,553 1,663 Source: Ministry of Professional & Technical Training, AEPAM, Islamabad E: Estimated, P: Provisional, *: Including Pre-Primary, Mosque Schools, BECS and NCHD

Human Development Index (HDI)

According to the United Nations Development Programme (UNDP) HDI 2016 Report23, Pakistan’s metrics are as follows:

22 (Government of Pakistan, 2016-17)

16 How to Export - Pakistan

Table 20: Pakistan Human Development Index Gross national Expected Mean Years GNI per Life income HDI Years of of capita rank HDI Expectancy (GNI) per capita 2015 Schooling Schooling minus rank at Birth 2015 2015 using 2011 2015 2015 HDI rank PPP USD 0.550 66.4 8.1 5.1 5,031 –10 148

Pakistan ranks last among the medium human development countries. Compared to other countries Pakistan ranks as follows:

Table 21: Pakistan's HDI and Component Indicators for 2015 Relative to Selected Countries and Groups24 Life Expected GNI per HDI HDI Mean years expectancy years of capita (PPP value rank of schooling at birth schooling USD) Pakistan 0.550 147 66.4 8.1 5.1 5,031 Bangladesh 0.579 139 72.0 10.2 5.2 3,341 India 0.624 131 68.3 11.7 6.3 5,663 South Asia 0.621 - 68.7 11.3 6.2 5,799 Medium 0.631 - 68.6 11.5 6.6 6,281 HDI

A study by SPDC-Pakistan (2016)25 also provides HDI classifications within provinces and districts of Pakistan.

Figure 8: Human Development Indices at Regional, National and Provincial Level

1.3 Political System

Pakistan is a federal Government established under the Constitution. The Government is composed of the Executive, Legislative, and Judicial branches. All powers are vested by the Constitution in the Parliament, the Prime Minister and the

23http://hdr.undp.org/sites/default/files/2016_human_development_report.pdf (UNDP, Human Development Report, 2016) 24http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/PAK.pdf (UNDP, UNDP, 2016) 25http://www.spdc.org.pk/Data/Publication/PDF/RR-96.pdf

17 How to Export - Pakistan

Supreme Court. The powers and duties of these branches are further defined by acts and amendments of the Parliament, including the creation of executive institutions, departments and courts inferior to the Supreme Court. By constitutional powers, the President promulgates ordinances and passes bills. The President acts as the ceremonial figurehead while the people-elected Prime Minister acts as the chief executive (of the Executive branch) and is responsible for running the federal Government. There is a bicameral Parliament with the National Assembly as a lower House and the Senate as an upper House.

1.3.1 Ministries and Key Economic Bodies

Given below is the list of the central Government’s Ministries:

1. Cabinet Secretariat 2. Ministry of Commerce and Textile Industry 3. Ministry of Communications 4. Ministry of Defense 5. Ministry of Defense Production 6. Ministry of Federal Education and Professional Training 7. Ministry of Finance, Revenue, Economic Affairs, Statistics and Privatization 8. Ministry of Foreign Affairs 9. Ministry of Housing and Works 10. Ministry of Human Rights 11. Ministry of Industries and Production 12. Ministry of Information Technology and Telecommunication 13. Ministry of Information, Broadcasting and National Heritage 14. Ministry of Inter-Provincial Coordination 15. Ministry of Interior and Narcotics Control 16. Ministry of Kashmir Affairs and Gilgit Baltistan 17. Ministry of Law and Justice 18. Ministry of National Food Security and Research 19. Ministry of National Health Services Regulation and Coordination 20. Ministry of Overseas Pakistanis and Human Resource Development 21. Ministry of Parliamentary Affairs 22. Ministry of Petroleum and Natural Resources 23. Ministry of Planning and Development 24. Ministry of Ports and Shipping 25. Ministry of Railways 26. Ministry of Religious Affairs and Inter-faith Harmony 27. Ministry of Science and Technology 28. Ministry of States and Frontier Regions 29. Ministry of Water and Power

1.3.2 Key Governmental Economic Bodies with Relevance to Foreign Trade

1. Directorate General of Trade Organizations 2. National Tariff Commission 3. Pakistan Horticulture Development and Export Company 4. Pakistan Institute of Trade and Development 5. Trade Development Authority of Pakistan

18 How to Export - Pakistan

6. Trading Corporation of Pakistan 7. Federal Board of Revenue 8. Strategic Export Control Division 9. Export Processing Zone Authority 10. National Productivity Organization 11. Pakistan Gems and Jewellery Development Company 12. Pakistan Industrial Development Corporation 13. Pakistan Industrial Technical Assistance Centre 14. Small and Medium Enterprise Development Authority 15. Oil and Gas Development Company 16. Pakistan Mineral Development Corporation 17. National Institute of Electronics 18. National Institute of Oceanography 19. Pakistan Antarctic Program 20. Pakistan Council for Renewable Energy Technologies 21. Pakistan Council of Scientific and Industrial Research 22. Pakistan Engineering Council 23. Pakistan National Accreditation Council 24. Pakistan Scientific and Technological Information Center 25. Pakistan Standards and Quality Control Authority 26. Planning Commission of Pakistan

Each of the above bodies has a website, accessible with its name.

Figure 9: Parliament House of Pakistan

1.4 Administrative Organization

1.4.1 Legislative Branch

The Legislative branch is known as the Parliament, a term for legislature inherited from the United Kingdom. The Parliament has two Houses: The National Assembly is the lower House and has 342 members; 272 are elected directly by the people, while 70 seats are reserved for women and religious minorities. The Senate is the

19 How to Export - Pakistan

upper House and has 104 senators, elected indirectly by members of provincial assemblies for six-year terms.

1.4.2 Executive Branch

The Prime Minister is the executive head of the Government, who forms the cabinet of Ministers. Under each Ministry, there are secretaries for specific roles. In provinces, Governors along with Chief Ministers look after local affairs.

 Key administrative personnel in Pakistan include: o All Ministers that constitute the cabinet o Chiefs of the three armed forces (Army, Air Force and Navy) o The Chairmen and other Members of the federal commissions and public institutions. o Ambassadors and High Commissioners to other countries. o The cabinet secretaries and directors in the administrative positions of the Government.

The President of Pakistan is a ceremonial figurehead, a ceremonial head of state representing the unity of the country. The president is elected for a five-year term by an indirect election.

1.4.3 Judicial Branch

Developed from the legal tenets of British and American Law, Pakistan's independent judicial system consists of the Supreme Court of Pakistan, Provincial High Courts, District Courts, Anti-terrorism courts, Sharia courts, and Environmental courts all over the country.

Figure 10: Supreme Court of Pakistan

20 How to Export - Pakistan

1.4.4 Elections and Voting System

Pakistan has an asymmetric federal Government with elected officials at the national (federal), provincial, tribal, and local levels. The Constitution has set in five years the Government term, but if a Vote of no confidence movement wins in the Parliament, the Government falls and is immediately replaced with a caretaker Government, initiated by the President in consultation with the Prime Minister. The new Government has to submit to a vote of confidence from the National Assembly.

1.4.5 Provincial Administration and Governments26

There are five provincial Governments that rule the five provinces of the state; the Chief Ministers head the provincial Governments. All provincial assemblies are unicameral, elected for five years. The Governors, who are appointed by the President on recommendation of the Prime Minister, act only as representatives of the federal Government in the province and do not have any part in operational matters of the provincial Government.

Top 5 Parties Votes and Seats in Last General Elections (2013)27

No. Party Votes Seats won 1. Pakistan Muslim League (N) 14,874,104 166 2. Pakistan Tehreek-e-Insaf 7,679,954 35 3. Pakistan People’s Party 6,911,218 47 4. Independents 5,880,658 43 5. Muttahida Qaumi Movement 2,456,153 25

Administrative Units of Pakistan

The administrative units of Pakistan consist of five provinces, one federal capital territory, one autonomous and disputed territory (Azad Jammu and Kashmir), and a group of federally administered tribal areas (Federally Administered Tribal Area- FATA).

Pakistan has a six-tier administrative set up:

 Federal, or national level One central Government  Provincial level 5 provinces  Divisional level 34 divisions  District level 149 districts  Tehsil (or sub-district, or taluka) level 588 tehsils  Union councils 5,000+ union councils

26www.pbs.gov.pk 27 www.ecp.gov.pk

21 How to Export - Pakistan

Azad Jammu & Kashmir (AJK) is technically an autonomous state, aligned with Pakistan. Its affairs are handled directly by the federal Government. Federally Administered Tribal Areas and Islamabad Capital Territory fall directly under the federal Government too.

Additionally, women have been allotted a minimum of 33% of the seats on the elected forums, like national assembly, senate, provincial assemblies, district councils, tehsil councils, union councils, etc.

1.4.6 List of International Agreements to Which Pakistan is a Signatory

Pakistan is a member of the following international bodies:

1. International Atomic Energy Agency (IAEA) 2. International Bank for Reconstruction and Development (IBRD) 3. International Chamber of Commerce (ICC) 4. International Civil Aviation Organization (ICAO) 5. International Criminal Police Organization (Interpol) 6. International Development Association (IDA) 7. International Finance Corporation (IFC) 8. International Fund for Agricultural Development (IFAD) 9. International Maritime Organization (IMO) 10. International Mobile Satellite Organization (IMSO) 11. International Telecommunication Union (ITU) 12. International Telecommunications Satellite Organization (ITSO) 13. International Trade Union Confederation (ITUC) 14. Inter-Parliamentary Union (IPU) 15. Islamic Development Bank (IDB) 16. Multilateral Investment Guarantee Agency (MIGA) 17. Organization of Islamic Cooperation (OIC) 18. Organization for the Prohibition of Chemical Weapons (OPCW) 19. Shanghai Cooperation Organization (SCO) (observer) 20. South Asia Co-operative Environment Program (SACEP) 21. South Asian Association for Regional Cooperation (SAARC) 22. United Nations (UN) 23. United Nations Conference on Trade and Development (UNCTAD) 24. United Nations Industrial Development Organization (UNIDO) 25. Universal Postal Union (UPU) 26. World Confederation of Labour (WCL) 27. World Customs Organization (WCO) 28. World Federation of Trade Unions (WFTU) 29. World Intellectual Property Organization (WIPO) 30. World Tourism Organization (UNWTO) 31. World Trade Organization (WTO)

22 How to Export - Pakistan

1.4.7 Trade Treaties

Pakistan is a signatory to the following international trade treaties (Source: Ministry of Commerce of Pakistan):

a. Trade & Investment Framework Agreement (TIFA) between Pakistan and USA b. Pak-Afghanistan Transit Trade Agreement c. Agreement on South Asian Free Trade Area d. Pak-Malaysia Trade Agreements e. Pak-China Trade Agreements f. Pak-Sri Lanka Free Trade Agreement g. Pak-Iran Preferential Trade Agreement h. Pak-Mauritius Preferential Trade Agreement i. Pak-Indonesia Preferential Trade Agreement

Figure 11: Major Trade of Pakistan

23 How to Export - Pakistan

2. ECONOMY, CURRENCY AND FINANCES

2.1 Economic Setting

2.1.1 General Characteristics of the Economy

The growth poles of Pakistan's economy are situated along the Indus River. The diversified economies of Karachi and major urban centres in the Punjab coexist with other lesser-developed areas of the country. Internal political disputes, a fast- growing population and mixed levels of foreign investment have adversely affected the economy. Foreign remittances of Pakistanis mostly working in the Middle East bolster foreign exchange reserves. Yet a growing current accounts deficit, due to a widening trade gap developed as a result of import growth exceeding export expansion, reduces reserves and GDP growth in the medium term.

Pakistan is currently undergoing a process of economic liberalization, including privatization of Government corporations, aimed to attract foreign investment and decrease the budget deficit. In 2015, the foreign currency reserves crossed USD20 billion, which led to a stable outlook in the long-term rating by Standard & Poor's. In 2016, a BMI Research report named Pakistan as one of the ten emerging economies, with a particular focus on its manufacturing hub.

The major sectors in Pakistan are agriculture, services, industries and mining. Being an agrarian economy for the 7 decades of its existence, it has relied on cotton and horticultural produce for its exports. Cotton has been exported in raw as well as processed to produce semi-finished and finished products in textiles.

In mining, Pakistan has ample coal reserves as well as reserves of different metals and minerals. However, the industry is not performing at its full capacity as the extraction of these minerals has not started in some of the identified reserves including Thar coal, Sandak, Rekodek, Chiniot and other sites across Pakistan.

2.1.2 Current Development Stage

In 2016, the Pakistani economy ranked the 24th largest in the world in terms of purchasing power parity (PPP), the 43rd largest in terms of nominal gross domestic product and had a GDP per capita of USD 1,468.2.28. However, per capita income calculations don’t account for Pakistan's undocumented economy, estimated to be 36% of its overall economy. Pakistan is one of the Next Eleven: the eleven countries with the potential for becoming one of the world's largest economies in the 21st century. Currently, the economy is semi-industrialized. Primary export commodities include textiles, chemicals, carpets/rugs and leather and sports goods.

28 (Bank T. W., The World Bank, 2016)

24 How to Export - Pakistan

2.1.3 Pakistan Economy – Recent Developments

Pakistan has seen its growth accelerate, stocks soar, currency stabilize and foreign- exchange reserves tripled to a record in recent years. Currently, the economy faces the test of going without the safety net of an IMF program.

The country’s success since 2013 has come under a USD6.6 billion IMF loan that helped avert a balance-of-payment crisis. Albeit with limited progress on reforms, Pakistan’s gross domestic product growth accelerated from an average of 3 percent to almost 5 percent, in the last five years since 2013. According to the IMF, reasons include support by a buoyant construction activity, strengthened private sector credit growth and Chinese-led investment. The rupee and Pakistan’s stocks have been among Asia’s best performers since 2013, boosted by the IMF program and MSCI Inc.’s (Morgan Stanley Capital International) June 2017 declaration of inclusion of the nation’s equities in its emerging-markets index.

The fiscal deficit of 4.6 percent for the year ending in July has surpassed the IMF program’s target and is still too large, while tax collection remains the weakest in the region.

As part of the China-Pakistan Economic Corridor (CPEC) program, China has been engaged in an investment of approximately USD 62 billion29 in projects and loans, including new power plants. Some of these initiatives are expected to help end the national energy shortfall, which is currently in the range of 3,000-5,000 megawatts.

2.1.4 Share of Capital Goods Imports in Developing the Domestic Industrial Base

In recent years, the share of capital goods as a percentage of total imports has been steadily rising as depicted below.

Table 22: Share of Capital Goods Imports30 Million USD Capital Goods Year Total Consumer Raw % of total Imports Goods Materials Amount Imports 2011-12 41,373 5,604 23,656 12,113 29.28% 2012-13 41,427 6,215 22,417 12,795 30.89% 2013-14 46,121 7,771 24,524 13,826 29.98% 2014-15 44,399 7,724 21,173 15,502 34.92% 2015-16 44,441 8,308 18,009 18,124 40.78%

29 (Dawn News, 2016) 30 (Pakistan Bureau of Statistics)

25 How to Export - Pakistan

Figure 12: GDP Growth Rate, 2006-2016

Pakistan GDP Growth Rate

5.54 6 4.99 4.71 4.05 4.04 3.84 3.62 3.68 4

2.58

2

0.36

0 2006 2008 2010 2012 2014 2016 Source: Tradingeconomics.com | Pakistan Bureau of Pakistan

2.1.5 Unemployment Level over the Past 5 Years

The total labour force in Pakistan is estimated at 63.03 million in the year 2014-15 out of which, 59.1 are employed and 3.93 million unemployed; implying around 6.3 per cent of unemployment rate. Within the employments sector, employment of women is lower compared to men.

Unemployment level in Pakistan has been hovering around 6% over the past five years as shown below31:

Table 23: Unemployment Rate (2012-16)32 End of Year Unemployment 2016 6% 2015 5.9% 2014 6.0% 2013 6.3% 2012 6.1%

2.1.6 Inflation Rates

The table below presents six years’ data on inflation rate, measured by change in Consumer Price Index (CPI). As can be seen, there are negligible discrepancies in the estimates of the State Bank of Pakistan, the World Bank, OECD and IMF.

31Economics, Trading Economics, www.tradingeconomics.com 32 Statistics, Labour Force Statistics, Pakistan Bureau of Statistics, 2013-14

26 How to Export - Pakistan

Table 24: Inflation Rate Government of Pakistan33 World Bank and OECD Year IMF Dataii35 (CPI Movement) National Accountsi34 April 2017 4.8% - 4.95% April 2016 4.2% 3.753% 3.324% April 2015 2.1% 2.54% 4.526% April 2014 9.2 % 7.192% 8.621% April 2013 5.8 % 7.69% 7.361% April 2012 11.3% 9.685% 11.005% Source: Pakistan Bureau of Statistics, 2016, World Bank, 2016, IMF, 2016

2.2 Principal Economic Sectors

2.2.1 Agricultural Sector

In agriculture, the key provinces are Punjab and Sindh, particularly the areas adjoining major rivers i.e. Indus, Chenab, Jehlum etc. Central Khyber Pakhtoonkhwa (KP) also offers rich agricultural regions, where a variety of agriculture and horticultural products are produced. The most important crops of Pakistan are wheat, sugar cane, cotton, and rice, which together account for more than 75% of the value of total crop output. This sector employs an estimated 42.3% of the labor force and its produce constitutes approximately 19.8% of Pakistan’s GDP36.

Figure 13: Agriculture in Pakistan

33 (Pakistan S. B., Inflation Monitor, 2012-2017) 34http:// (Bank T. W., Inflation, Consumer Prices, 2015) 35http:// (Fund, International Monetary Fund, 2016) 36http:// (Pakistan M. o., Overview of the Economy, 2015-17)

27 How to Export - Pakistan

It is also the largest source of foreign exchange earnings. However, considering its share of GDP was 53% at the time of independence, the relative economic importance of agriculture has declined.

Pakistan is a net food exporter, except in occasional years, when harvests are adversely affected by climate and unavailability of irrigated water. Primary exports include rice, cotton, fish, vegetables and fruits (mostly oranges and mangoes). Pakistan imports vegetable oil, wheat, pulses and consumer foods. The country is the largest camel market, second largest apricot and ghee (clarified butter used as cooking oil) market and third largest cotton, onion and milk market in Asia.

Table 25: Pakistani Exports (2015-17) 2014-15 2015-16 2016-17 S. No Sector/Industry with Percent Share in GDP 2012-13 2013-14 (F) ( R) (P) 1 Agricultural Sector (1 to 4) 21.42 21.10 20.71 19.87 19.53 2 Crops (i + ii + iii) 8.60 8.49 8.17 7.43 7.27 3 i) Important Crops 5.35 5.51 5.21 4.71 4.66 4 ii) Other Crops 2.63 2.39 2.35 2.26 2.15 5 iii) Cotton Ginning 0.62 0.59 0.61 0.46 0.46 6 Livestock 11.91 11.73 11.72 11.60 11.39 7 Forestry 0.47 0.46 0.38 0.42 0.46 8 Fishing 0.44 0.43 0.44 0.43 0.41

2.2.2 Mining Sector

Pakistan is rich in mineral resources, including clays (china clay and fire clay), copper, dolomite, gypsum, iron ore, limestone, marble (onyx), salt, sand and gravel and silica sand. In energy resources, including coal, natural gas, and oil, and precious and semiprecious stones. The country is among the world’s 20 leading producers and 5 leading exporters of cement. Pakistan ranked 3rd in world production of iron oxide pigments, 15th of barite, and 16th of cement. Pakistan exported cement to Afghanistan, Djibouti, India, Iraq, Kenya, Mozambique, South Africa, Sri Lanka, Sudan, and Tanzania. Other minerals include coal, marble and granite, copper, gold, chromite, mineral salt and bauxite.

Despite its great economic potential, Mining is an under- explored sector in Pakistan. There are a variety of precious and semi-precious stones available in the country having great potential for mining. These include peridot, aquamarine, topaz, ruby, emerald, rare-earth minerals bastnaesite and xenotime, sphene, tourmaline, and many varieties and types of quartz.

Iron ore, a primary ingredient in steel making, and quality coal supplies reach Pakistan from the Indian or Australian ports. Iron ore is found in various regions of Pakistan including Nokundi (Baluchistan), Chiniot (Punjab) and the largest one in Kalabagh (Less than 42% quality), Haripur (KPK) and other Northern Areas. Lately reserves of Iron ore were found in Chiniot with initial estimates indicating around

28 How to Export - Pakistan

500 million tonnes of deposits. The international laboratories attest it as the best iron ore deposit of the country with total iron contents is in the range of 63 to 65 percent.

Figure 14: Sandak Mine Project, Balochistan, Pakistan

The World’s 5th largest coal deposits are present in Pakistan at Thar (Sindh) with the following features:

Area of the field around: 9,000 sq. km Coal Resources: 175 Billion tonnes Coal seam depth: 114-203 m Coal category: Lignite World Ranking: Fifth largest Total reserves equal: 50 Billion tonnes oil Electricity gen. potential: 100,000 MW/ year

Total reserves are equivalent in energy to 50 billion tonnes of oil (more than the Iran and Saudi Arabia combined oil reserves) or over 2000 TCF of gas (42 times greater than the total gas reserves discovered in Pakistan so far).

Pakistan Mineral Development Corporation (PMDC)37 is an autonomous corporation under the administrative control of the Ministry of Petroleum and Natural Resources, Government of Pakistan. It is involved in exploration and evaluation of economic mineral deposits, preparation of techno-economic feasibility reports,

37http://www.pmdc.gov.pk/

29 How to Export - Pakistan

mining and marketing. PMDC is operating 4 Coal Mines, 4 Salt Mines/ quarries and a silica sand quarry. PMDC shares 17% of the coal and 58% of the total salt production in the country.

Table 26: Pakistan Carbon Fuel Potential Potential (Million TOE) Untapped Sector Potential areas (Tonnes of Oil equivalent) (%) Exploration and Production, Oil 20.10 5.93 (32.1%) Refineries, Pipelines, Distribution 14.84 Exploration, Compression, Gas 30.24 (49.1%) Transportation, Distribution, Storage Exploration, Extraction, Coal 187 186 (99.9%) Gasification, Integrated Power Generation

Table 27: Pakistan Coal Resources Coal Resource Sr. Province/Area (Million Tonnes) 1 Sindh 186,000 2 Balochistan 217 3 Punjab 235 4 Khyber-Pakhtunkhawa 90 5 Azad Jammu & Kashmir 9 Total 186,551

Pakistan’s coal potential is estimated at 187 billion tonnes. The current consumption of coal is 11.0 million tonnes per annum against an annual production of 5.0 million tonnes. The supply and demand gap of about 6.0 million tonnes of coal is being met through imported coal.

2.2.3 Manufacturing Sector

The bulk of Pakistani manufacturing sector exists in Karachi and in the province of Punjab. The majority of the textile mills, food processing facilities, cement factories, pharmaceuticals, fertilizer production and leather processing units are located in Punjab. In Karachi, automobiles, steel industry, chemicals engineering products etc. are produced. A few industries also exist in the province of KP, while Balochistan is aspiring to benefit from the proposed Export Processing Zone to be constructed under CPEC.

According to the Pakistan Economic Survey 2015-16, the industrial and manufacturing sector contributes 21.02% to the GDP and the manufacturing sector accounts for about 13.6% of GDP. The latter employs 15.3% of the workforce38. Large Scale Manufacturing (LSM) accounts for 10.9 % of the GDP while Small Scale Manufacturing (SSM) accounts for 1.8%. The manufacturing sector has experienced a 5% growth rate while LSM, a 4.7% growth rate.

38 (Finance, Manufacturing and Mining, 2016-17)

30 How to Export - Pakistan

Figure 15: A Spinning Mill in Faisalabad, Pakistan

Cotton textile production and apparel manufacturing are Pakistan's largest industries. Other major industries include cement, fertilizers, automobile parts, edible oil, sugar, steel, food, beverages and tobacco, pharmaceuticals, chemicals, machinery, leather products, wood products, iron and steel products, paper and board and electronics.

The industry has been threatened by the lack of energy sources, inputs, credit, and low Foreign Direct Investment (FDI). The Government’s recent efforts to address power and energy issues have led to the Business Confidence Index (BCI) to rise to a record high of 36%. China Pakistan Economic Corridor (CPEC) has become another source of potential for new development and growth in this sector.

The Government is privatizing large-scale industrial units, and the public sector accounts for a shrinking proportion of industrial output. Growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and boost the export industries.

According to the Small and Medium Enterprises Development Authority (SMEDA) and Economic Survey reports, the share of SMEs in the annual GDP is 40%; and SMEs have generated significant employment opportunities for skilled workers and entrepreneurs. SME firms represent nearly 90% of all the national enterprises and employ 80% of the non-agricultural labor force. The potential of this sector is evident.

31 How to Export - Pakistan

Table 28: Percent Growth of Selected Industrial Items Cotton Cotton Jute Veg. Soda Caustic Cigarettes Fertilizers Cement Sugar Yarn Cloth Goods Ghee Ash Soda 2010-11 5.46 1.08 (12.30) 1.57 0.17 (8.88) (8.43) (7.70) (5.62) 32.62 2011-12 0.52 0.30 0.98 1.01 (5.27) 0.08 2.93 (1.93) 4.11 11.16 2012-13 3.57 0.56 9.28 3.25 8.75 (4.02) 5.07 (1.22) 2.11 9.80 2013-14 8.62 0.68 (1.07) 4.08 (4.30) 16.50 1.17 11.72 (8.42) 10.03 2014-15 1.09 0.08 (7.21) (0.23) (2.81) 4.56 2.44 6.83 9.85 (7.75) 2015-16 1.54 0.43 (36.65) 6.12 (8.33) 15.92 10.41 6.14 26.85 2.85 Note: Figures in Parenthesis represent negative growth Source: Pakistan Bureau of Statistics, 2016

2.2.4 Energy Sector

The primary sources of electricity in Pakistan are hydel, nuclear and thermal (gas/ steam/ furnace oil) with the major power producers being the Water and Power Development Authority (WAPDA), Karachi Electric Supply Company (KESC), Independent Power Projects (IPPs) and Pakistan Atomic Energy Commission (PAEC). From 2005 to 2012, Pakistan underwent a massive energy crisis due to weak financial positions of energy companies, falling gas production, under-utilization and under-development of indigenous coal and hydel resources, and high dependence on oil/gas.

Presently the subsidy for the power sector has been reduced and the 2013 National Power Policy was approved for sustainable power generation and control of transmission and distribution losses. Currently, distribution losses declined to 16.3%. Imports of liquefied natural gas (LNG), machinery for power plants and equipment for setting up renewable power generators like solar farms has also increased. New energy projects as well as infrastructure investment is estimated to have a financial outlay of USD 46 billion39.

Figure 16: Pakistan - Electricity Generation Capacity Composition40

Nuclear, FY 2017 Nuclear FY 2016 6% 4% Hydro, Hydro 30% 34%

Thermal Thermal , 64% 62%

39http://www.finance.gov.pk/survey/chapters_17/14-Energy.pdf (Finance, Energy, 2016-17) 40 Ministry of Water and Power, Government of Pakistan

32 How to Export - Pakistan

Table 29: Energy Profile41 Electricity - production: Natural gas - exports: 11,828 giga watt (2017) 0 cubic meter (2016 est.) country comparison to the world: 35 country comparison to the world: 106 Electricity - imports: Electricity - consumption: 452 million kWh (2016 est.) 85.9 billion kWh (2015 est.) country comparison to the world: 85 country comparison to the world: 35 Electricity - from fossil fuels: Electricity - installed generating capacity: 61.8% of total installed capacity (FY2015 est.) 23 million kW (2015 est.) country comparison to the world: 118 country comparison to the world: 36 Electricity - from hydroelectric plants: Electricity - from nuclear fuels: 31.8% of total installed capacity (FY2015 est.) 3.2% of total installed capacity (FY2015 est.) country comparison to the world: 79 country comparison to the world: 26 Crude Oil - production: Electricity - from other renewable sources: 85,500 bbl/day (2016 est.) 5.7% of total installed capacity (FY2015 est.) country comparison to the world: 46 country comparison to the world: 105 Crude Oil - imports: Crude Oil - proved reserves: 166,000 bbl/day (2014 est.) 350 million bbl (1 January 2017 est) country comparison to the world: 35 country comparison to the world: 54 Refined petroleum products - production: Refined petroleum products - consumption: 259,500 bbl/day (2014 est.) 517,000 bbl/day (2015 est.) country comparison to the world: 48 country comparison to the world: 35 to the world: 129 Refined petroleum products - exports: Refined petroleum products - imports: 20,720 bbl/day (2014 est.) 247,300 bbl/day (2014 est.) country comparison to the world: 75 country comparison to the world: 29 Natural gas - production: Carbon dioxide emissions from consumption 39.3 billion cubic meter (2015 est.) of energy: country comparison to the world: 23 145 million Mt (2013 est.) country comparison to the world: 33

Figure 17: Pakistan Electricity Production

41CIA Factbook (Agency, 2017)

33 How to Export - Pakistan

Figure 18: Tarbela Dam, Pakistan

2.2.5 Services Sector

Pakistan's services sector comprises approximately 59.16% of the GDP in 201642 and is the driving force behind economic growth and development. This sector has been growing at the rate of 5.71% annually, and includes wholesale and retail trade, transport, storage, communications, finance, and insurance, and Government and housing services. Pakistan is trying to promote the information industry and other modern services industries through incentives such as long-term tax holidays.

Attractive for investment, telecommunications has been a thriving industry; Revenues from July 2015 to March 2016 amounted to PKR 333.2 billion and PKR 744.6 billion and were collected by the national exchequer from taxes.43. Furthermore tele-density has improved as 70.4% of the population has access to cellular communication.

2.3 Currency and Finances

2.3.1 Currency and Exchange Rate

The basic unit of currency is the Pakistani Rupee (PKR) which is divided into 100 paisas. Currently, the newly printed PKR 5,000 note is the largest denomination in circulation.

The Pakistani rupee was pegged to the pound sterling until 1982, when the Government of General Zia-ul-Haq changed it to managed float. As a result, the rupee devalued by 38.5% between 1982-83.

42 (Pakistan M. o., Overview of Economics, 2016-17) 43 (Division F. , 2015-16)

34 How to Export - Pakistan

2.3.2 Convertibility and Foreign Exchange Rate

Within Pakistan, foreign currencies that are easy to convert include US Dollar, Euro Pound and currencies used in the Middle East. These include Saudi Riyal, UAE Dirham, Qatar Riyal, Kuwaiti Dinar etc. The Pakistani rupee is convertible in the major cities of Middle East and Europe.

The Pakistani rupee depreciated against the US dollar until the start of the 21st century, when Pakistan's large current-account surplus pushed the value of the rupee up versus the dollar. Pakistan's Central Bank then stabilized by lowering interest rates and buying dollars in order to preserve the country's export competitiveness.

Table 30: Exchange Rate (2002-2017)44 At end of USD GBP EURO 2002 58.30 93.48 61.15 2003 57.42 102.27 72.21 2004 59.45 114.46 80.92 2005 59.73 102.90 70.71 2006 60.78 119.00 80.23 2007 61.35 122.59 90.47 2008 78.70 113.61 110.83 2009 84.10 135.08 120.81 2010 85.70 132.34 113.87 2011 89.60 138.09 115.96 2012 96.90 156.58 128.05 2013 105.00 173.03 144.83 2014 100.40 156.32 122.13 2015 104.60 155.04 114.32 Mar-16 104.60 150.04 118.35 Jun-16 104.50 140.12 116.08 Sep-16 104.55 135.59 117.26 Dec-16 104.83 128.07 108.94 31 Oct-17 105.3 136.6 124.6

2.3.3 Balance of Payments and International Reserves

Foreign Exchange Reserves

Pakistan maintains foreign reserves in the State Bank of Pakistan. The currency of the reserves was solely US dollar incurring speculated losses after the dollar prices fell in 2005. The SBP then issued an official statement introducing the diversification of reserves in currencies including Euro and Yen, withholding ratio of diversification.

44Source: (Pakistan S. B., State Bank of Pakistan)

35 How to Export - Pakistan

Table 31: Foreign Exchange Reserves45 End of Foreign Exchange Reserves (Million USD) June 2011 18,243.8 June 2012 15,288.6 June 2013 11,019.6 June 2014 14,141.1 June 2015 18,699.2 June 2016 23,098.6 July 2017 21,447.6

Foreign Exchange Reserves in Pakistan averaged 15,015.36 USD million from 1998 until 2016, reaching an all-time high of 23,619.40 USD Million in September 2016.

Figure 19: Pakistan Foreign Exchange Reserves

Balance of Payments

Pakistan primarily exports to developed countries like China and OECD members and recorded an exports decline in 2016. Britain’s exit from the EU and a weaker British pound led to an export decline of 3.06% with continued growth in imports of 18.67%. To counter these problems, the Government of Pakistan has undertaken measures for export growth including provision of financing through Exim Bank, promotion of E-Commerce and IT exports, establishment of a Services Trade Development Council, reduction of mark-up rate on Export Refinancing Facility (EFR) from 9% in 2010 to 3% in 2016 and a reduction of rates for Long Term Financing Facility (LTFF) for 3-10 years duration from around 11.4% to 6%. Additionally, Free Trade Agreements with countries like China, Malaysia and Sri Lanka have led to the mutual strengthening of Pakistan’s partners’ trading positions.

Imports surged during July 2016-March 2017 due to an increase in the imports of capital equipment and fuel. Hence, the trade deficit increased from 2016 by 33.1%,

45 (Pakistan S. B., Domestic Markets & Monetary Management Department, 2010-15)

36 How to Export - Pakistan

amounting to USD 17.8 billion. The current account deficit also increased from USD 2.4 billion to USD 6.1 billion. However, Pakistan remained attractive for foreign investment as Net Foreign Direct Investment (FDI) grew by 12.4% and reached USD 1.6 billion, while net Foreign Portfolio Investment (FPI) saw an inflow of USD 631 million. Similarly, Pakistan’s foreign exchange (FX) reserves amounted to USD 20.8 billion.

Table 32: Summary of Balance of Payments (2014-2017) (Million USD) July-June July-March P* Items 2014-15 2015-16 2015-16 2016-17 Current Account Balance -2,709 3,394 -2,351 -6,130 Trade Balance -17,278 -18,585 -13,443 -17,841 Goods: Exports 24,089 21,965 16,320 16,101 Goods: Imports 41,367 550 29,763 33,942 Service Balance -2,884 -2,870 -1,958 -1,920 Services: Credit 5,854 5,438 4,070 4,322 Services: Debit 8,738 8,308 6,028 6,242 Income Account Balance -4,581 -5,322 -3,850 -3,187 Income: Credit 679 637 427 531 Income: Debit 5,260 5,959 4,277 3,718 Current Transfers Net 22,040 23,383 16,900 16,818 Of Which: Workers' Remittances 18,721 19,917 14,388 14,058 Capital Account 375 273 213 260 Finance Account 4,996 5,605 3,372 4,806 Direct Investment in Pakistan 923 1,904 1,425 1,601 Portfolio Investment in Pakistan 1,884 -429 -408 659 Other Investment Liabilities 2,173 4,176 2,084 3,926 Net Errors and Omissions -16 168 -90 -550 Overall Balance 2,646 2,652 1,144 -1,614 *P: Provisional for 2016-17

2.3.4 International Reserves

Gold Reserves showed an average of 64.90 tonnes from 2000 until 2017; an all-time high of 65.44 tonnes in the fourth quarter of 2007, a record low of 64.38 tonnes in the first quarter of 2010 and a rise from 64.50 tonnes in the fourth quarter of 2016 to 64.52 tonnes in the first quarter of 2017.

Foreign Exchange Reserves averaged 15,573.05 USD million from 1998 to 2017, with a maximum of 24,025.80 USD million in 2016, minimum of 19,73.60 USD million in December 199946 and a decrease from 21,572.10 USD million in March 2017 to 21,019.20 USD million in April 2017.

46 (Economics, Trading Economics, www.tradingeconomics.com, 2000-2017)

37 How to Export - Pakistan

Table 33: Liquid Foreign Exchange Reserves (Million USD)47 Net reserves with Net reserves with Total liquid Foreign End period SBP banks Exchange reserves 2010-11 14,783.6 3,460.2 18,243.8 2011-12 10,803.3 4,485.3 15,288.6 2012-13 6,008.4 5,011.2 11,019.6 2013-14 9,097.5 5,043.6 14,141.1 2014-15 13,525.7 5,173.5 18,699.2 June, 2016 18,142.7 4,955.9 23,098.6 30-Jun-2017 16,143.3 5,224.5 21,367.8

2.3.5 IMF Reserve Position

The IMF has provided the information for Pakistan’s reserves status as under:

Table 34: IMF Reserve Position Pakistan Reserve Last Previous Highest Lowest Unit Position

Interest Rate 5.75 5.75 19.50 5.75 Percent

Interbank Rate 6.01 6.01 17.42 1.21 Percent

Money Supply M0 4,522,238.18 4,343,944 4,522,238 1,413,617 PKR Million

Money Supply M1 11,414,098 11,112,338 11,414,098 3,168,848 PKR Million

Money Supply M2 13,821,912 13,482,689 13,821,912 4,431,502 PKR Million

Money Supply M3 17,224,872 16,874,153 17,224,872 5,548,454 PKR Million Deposit Interest 6 7.26 8.68 1.63 Percent Rate Foreign Exchange 21,019 21,572 24,026 1,974 USD Million Reserves

2.3.6 Special Drawing Right (SDR)

The IMF may allocate SDRs to member countries, who are participants of the SDR Department in proportion to their IMF quotas. As of March 2017, SDRs, the International Development Association (IDA) and the Poverty Reduction and Growth Trust (PRGT) eligibility were aligned in all but eight cases, none of which are PRGT-eligible. Of the eight, Mongolia, Nigeria, and Pakistan have blended access to IDA and the International Bank for Reconstruction and Development (IBRD) resources.48

Table 35: Financial Position of Pakistan (Million USD)49 June June June June June 2013 2014 2015 2016 2017 Stand-By Arrangement 2,550 670.86 0 0 0 GRA Credit Extended Fund Facility 0 1,080.0 2,880.0 4,320.0 4,393.0 Outstanding Emergency Natural 296.98 185.61 37.1 0 0

47 (Pakistan S. B., Domestic Markets & Monetary Management Department, 2015) 48 (Fund, Fund, International Monetary) 49 (Fund, International Monetary Fund)

38 How to Export - Pakistan

Table 35: Financial Position of Pakistan (Million USD)49 June June June June June 2013 2014 2015 2016 2017 Disaster Assistance Total GRA Credit 2,847.94 1,936.47 2,917.12 4,320.0 4,393.0 Outstanding PRGT Extended Credit Facility 68.9 17.2 0 0 0 Credit Total PRG Credit 68.91 17.2 0 0 0 Outstanding Outstanding IMF Securities Account 2,751.50 1,810.6 2,917.71 4,587.0 4,618.7 IMF’s IMF No. 1 Account 1,095.24 1,146.7 995.66 1,787.0 1,771.2 Holding of IMF No. 2 Account 230 231 230 233 231 Currencies CVA Account 34.77 12.66 37.32 -23.55 33.96 Total Holdings 3,881.52 2,970.05 3,950.70 6,350.88 6,423.88 Quota 1,033.7 1,033.70 1,033.70 2,031.0 2,031.0 SDR Holdings 573.07 538.01 505.56 462.0 436.42 SDR Allocation 988.56 988.56 988.56 988.56 988.56

2.4 Public Finances

Table 36: National Budget for 2017-18 (Announced June 2017) Revised Budget Budget Estimate All figures in Millions of USD 2016-17 2017-18 Net Revenue 26,236 29,613 Expenditure Development Expenditure 8,830 12,642 Current Expenditure 38,198 36,340 Total 47,028 48,981 Deficit to be met from Capital Receipts 1,509 4,038 Borrowings 16,387 11,585 Privatization Proceeds 170 472 Other Sources 2,726 3,274 Total Deficit 20,792 19,368

2.4.1 The Financial Sector

Pakistan's banking sector remained strong and resilient during the world financial crisis in 2008–09, a feature which has served to attract a substantial amount of FDI in the sector. Stress tests conducted in June 2008 data indicate that the large banks are relatively robust, with the medium and small-sized banks positioning themselves in niche markets. The banking sector turned profitable in 2002. Their profits continued to rise for the next five years and peaked to PKR 84.1 billion (USD1.1 billion) in 2006. The credit card market has been growing, with card sales crossing the 1 million mark in mid-2005.

Since 2000, banks have targeted the middle class, with an aggressive consumer finance marketing, leading to a boom in construction and more than 7-month waiting lists for certain car models. In 2005, the Federal Bureau of

39 How to Export - Pakistan

Statistics provisionally valued this sector at PKR. 311,741 million, registering over 166% growth since 2000.

2.4.2 Banking System

The State Bank of Pakistan (SBP) was established as the central bank under the State Bank of Pakistan Act, 1956. It mandates the bank to regulate the monetary and credit system of Pakistan and to foster its growth in the best national interest with a view to securing monetary stability and fuller utilization of the country’s productive resources.

Subsidiaries of the State Bank of Pakistan (SBP)

The SBP holds two fully owned subsidiaries. These are:

 SBP-Banking Services Corporation (SBP-BSC) SBP-BSC supports SBP in functions such as currency and credit management, facilitation of inter-bank settlements, and sale/purchase of savings instruments of the Government on behalf of the Central Directorate of National Savings. It also collects revenue and makes payments for and on behalf of the Government. It carries out operational work relating to development finance, management of public debt, foreign exchange operations and export refinance. The Board of Directors of SBP-BSC, chaired by the Governor SBP, comprises all members of the Central Board of SBP and the Managing Director of SBP-BSC. SBP-BSC consists of 16 field offices in Pakistan with the head office in Karachi.

 National Institute of Banking and Finance (NIBAF) Based in Islamabad with an office in Karachi, NIBAF is the training arm of SBP. It provides executive development trainings to new inductees and SBP employees. It conducts international courses on central and commercial banking in collaboration with the Federal Government. NIBAF also offers training to SBP-BSC and other financial institutions. Incorporated under the 1984 Companies Ordinance, it has a separate Board of Directors.

Functions of the State Bank of Pakistan (SBP)

The State Bank of Pakistan performs traditional and developmental functions to achieve macro-economic goals. The main functions and responsibilities of the State Bank can be broadly categorized as follows:

Regulation of Liquidity: SBP employs direct and indirect instruments of monetary management to maintain monetary stability in order to achieve stability in domestic prices, promote economic growth, and regulate the volume and direction of flow of credit.

Ensuring Soundness of Financial System - Regulation and Supervision: One of SBP’s responsibilities is the regulation and the supervision of the financial system, to ensure soundness and stability as well as the protection of depositors. New

40 How to Export - Pakistan

inspection techniques are implemented to ensure quality inspection and supervision of financial institutions. Banking activities are monitored through an ‘off-site’ surveillance and ‘on-site’ inspection and supervision system. SBP conducts off-site surveillance through regular checking from different banks. On-site inspection is undertaken by the State Bank in the premises of the concerned banks when required.

Exchange Rate Management and Balance of Payments: In order to maintain the external value of the currency, SBP is authorized to purchase/sale gold, silver or approved foreign exchange and SDR transactions with the IMF50.SBP has to prevent wide rupee exchange rate fluctuations to ensure export and foreign exchange stability. The currency was linked to the pound sterling till September 1971 and subsequently to the U.S. Dollar. To minimize pressure on foreign exchange reserves and protect the economy from any sanctions, SBP adopted the market-based floating exchange rate system in 1999.

Developmental Role: Participation in the development process includes rehabilitation of the banking system, development of new financial institutions and debt instruments to promote financial intermediation, establishment of Development Financial Institutions (DFIs), directing the use of credit according to selected development priorities, provision of subsidized credit, and development of the capital market.

2.4.3 Country Ranking by Different International Ranking Agencies

Pakistan is ranked 144th among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Pakistan improved to 144 in 2016 from 148 in 2015. Ease of Doing Business in Pakistan averaged 112.78 from 2008 until 2016, reaching an all-time high of 148.00 in 2015 and a record low of 85.00 in 2009.

Standard & Poor's credit rating for Pakistan stands at B with stable outlook. Moody's credit rating for Pakistan was last set at B3 with stable outlook. Fitch's credit rating for Pakistan was last reported at B with stable outlook. The following table depicts the Government debt credit rating for Pakistan as reported by major credit rating agencies.

Table 37: Government Debt Credit Rating51 Rating Agency Rating Date Rating Outlook Moody’s 11 July 2017 B3 Stable Fitch 06 February, 2017 B Stable S & P 31 Oct 2016 B Stable TE 16 April 2016 19 Positive

50sub-sections 13(a) and 13(f) of Section 17 of the State Bank of Pakistan Act, 1956 (Pakistan S. B., State Bank of Pakistan ACT 1956, 1956) 51 (Economics, Trading Economics, 2014-16)

41 How to Export - Pakistan

3. OVERVIEW OF PAKISTAN’S FOREIGN TRADE

3.1 Recent Trends: General Considerations

Pakistan has bilateral and multilateral trade agreements with many nations and international organizations. It is a member of the World Trade Organization (WTO), the South Asian Free Trade Area (SAFTA) Agreement and the China-Pakistan Free Trade Agreement. Fluctuations in world demand for its exports, domestic political uncertainty and occasional droughts leading to low agricultural production have contributed to variability in Pakistan's trade deficit. The trade deficit for the fiscal year 2015/16 was USD 23.79 billion. For exports - USD 20.84 billion. For imports – USD 44.64 billion.

Pakistan's exports continue to be dominated by cotton textiles and apparel. Imports include petroleum and petroleum products, edible oil, chemicals, fertilizers, capital goods, industrial raw materials, and consumer products.

On 12 December 2013, the European Union granted GSP Plus status to Pakistan until 2017 and it has been extended until 2023. This has significantly improved EU- Pakistan trade relations with an increase of 38% in Pakistan's exports to EU since 2014. The European Union is one of Pakistan's largest trading partners and is the destination for more than 25% of Pakistan's exports.52

3.1.1 Current Share of Country's Trade

The following tables present the current share of Pakistan’s trade at various levels.

Table 38: Current Share of Country's Trade at Global Level GDP (million current USD, 2015) 269,971 Rank in world trade, 2015 Exports Imports GDP per capita (USD, 2013-2015) 1,341 Merchandises 66 52 Current account balance (% GDP, Excluding intra-EU trade -1.5 45 34 2012-2014) Trade per capita (USD, 2013-2015) 206 Commercial services 87 68 Trade (% GDP, 2013-2015) 15.3 Excluding intra-EU trade 60 48 Source: Ministry of Finance, Government of Pakistan, 2016 (Pakistan Economy Survey)

Table 39: Global Trade Over 5 Years 2012 2013 2014 2015 2016 Exports (USD 000) 24,613,676 25,120,883 24,722,182 22,089,018 20,533,793 Imports (US 000) 43,813,262 43,775,183 47,544,889 43,989,645 46,998,269

Over the past five years, imports by Pakistan have been consistently almost twice the value of goods exported.

52 Abdul Basit, Vice President, Lahore Chamber of Commerce and Industry, 2017 (www.lcci.com.pk)

42 How to Export - Pakistan

Table 40: Merchandises Trade with the World (2012-16) Indicator Unit 2012 2013 2014 2015 2016 Annual average growth Imports Billions of Euros 34.1 33.0 35.8 39.6 42.5 5.7 Exports Billions of Euros 19.6 19.3 19.0 20.3 19.0 -0.8 Balance Billions of Euros -14.5 -13.7 -16.8 -19.3 -23.5 Nil

Table 41: Pakistan's Trade with Different Trading / Regional Blocs (USD Thousand) Region/Trading Bloc 2014 2015 2016 Common Market of the Imports by Pakistan from 521,762 708,189 770,48 South (MERCOSUR) Exports by Pakistan to 147,728 128,649 100,383 Developed Market Imports by Pakistan from 9,524,278 9,753,968 10,897,894 Economies Exports by Pakistan to 11,555,380 10,961,826 11,075,785 Imports by Pakistan from 4,000,200 3,637,779 3,793,232 Developing 8 (D-8) Exports by Pakistan to 1,719,495 1,479,106 1,348,373 Developing Market Imports by Pakistan from 38,018,736 34,234,033 36,093,229 Economies Exports by Pakistan to 13,114,843 11,075,823 9,419,603 Imports by Pakistan from 4,401,018 4,285,200 4,778,165 European Union (EU 28) Exports by Pakistan to 7,225,810 6,639,589 6,917,518 Imports by Pakistan from 6,448,139 6,526,625 7,331,107 G7 Exports by Pakistan to 8,132,867 7,758,173 7,605,159 Least Developed Imports by Pakistan from 673,065 717,114 689,548 Countries Exports by Pakistan to 3,459,833 3,183,811 2,691,744 Organization of Imports by Pakistan from 14,888,258 11,086,348 10,451,905 Petroleum Exporting Exports by Pakistan to 2,260,739 1,679,630 1,469,111 Countries (OPEC)

3.1.2 Pakistan's Trade with Developed Countries

 The EU is a key trading partner. It consumes 21.2% of Pakistan's total exports.  EU-Pakistan trade increased by almost 4.7% annually between 2007 and 2011.  Exports to the EU are dominated by textiles, clothing and leather products. Textiles and clothing account for just under 75% of Pakistan's exports to the EU.  Pakistan's imports from the EU mainly include mechanical and electrical machinery as well as chemical and pharmaceutical products.  More than 78% of Pakistan's exports enter the EU at preferential rates.  Approximately 80% of the textiles and clothing articles imported to the EU from Pakistan enter the EU at a preferential tariff rate. Around a quarter of these imports are bed linen, table linen and toilet and kitchen linen.

However, relying so heavily on one product category carries risks for Pakistan. Trade diversification programs have been launched by the EU to reduce the country's reliance on the textiles and clothing sectors. From the data in the table shown above in table no. 41 Pakistan’s trade with developed marked economies is more favorable since in 2016 the value of imports and exports was almost equal at

43 How to Export - Pakistan

10,897,894 and 11,075,785, (thousands USD) respectively. Pakistan is in a favorable position since exports to these countries is greater than imports from them.

3.1.3 Pakistan's Trade with Oil Producing Countries

At present, Pakistan is importing oil from GCC countries (Persian Gulf) including the United Arab Emirates (UAE), Kuwait and Saudi Arabia. Imports from these countries are almost 10 times greater than the value of goods and services Pakistan exports to them.

3.1.4 Contribution and Structure of Foreign Trade

The following tables summarize the significant contribution of foreign trade:

Table 42: Imports and Exports Percentage of Gross Domestic Product Trade as Exports as Percentage Imports as Percentage Year Percentage of of GDP1 of GDP1 GDP1 2012 12.397% 20.409% 32.806% 2013 13.277% 20.056% 33.334% 2014 12.243% 18.659% 30.901% 2015 10.585% 17.019% 27.604% 2016 8.695% 15.821% 24.516%

Table 43: Structure of Exports (Million USD) July-March % July-March Quantity % Change Change Particulars 2015-16 2016-17 P* in 2015-16 2016-17 P* in Values Quantity Total 155,975.5 151,186.0 -3.1 Nil Nil Nil A Food Group 3,037.8 2,685.9 -11.6 Nil Nil Nil Rice 1,376.2 1,170.7 -14.9 3,140,788 2,684,622 -14.5 Basmati 316.9 293.1 -7.5 341,115 327,830 -3.9 Other Rice 1,059.3 877.6 -17.2 2,799,673 2,356,792 -15.8 Sugar 132.3 66.5 -49.7 293,541 123,443 -57.9 Fish & 240.0 276.3 15.1 92 103,277 12.2 Preparation Fruits 356.3 325.6 -8.6 590,671 439,797 -25.5 Vegetables 150.6 113.2 -24.9 508,355 386,109 -24.0 Spices 56.2 60.3 7.4 15,113 16,409 8.6 Meat & Meat 212.4 163.2 -23.1 61,656 43,125 -30.1 Preparation Other Food 513.8 510.0 -0.7 Nil Nil Nil Items Textile B 9,362.3 9,278.9 -0.9 Nil Nil Nil Manufactures Cotton Yarn 989.0 938.6 -5.1 327,036 344,468 5.3 Cotton Cloth 1,685.3 1,581.2 -6.2 1,659,455 1,410,359 -15

44 How to Export - Pakistan

Table 43: Structure of Exports (Million USD) July-March % July-March Quantity % Change Change Particulars 2015-16 2016-17 P* in 2015-16 2016-17 P* in Values Quantity Knitwear 1,746.9 1,745.7 -0.1 85,460 89,520 4.8 Bed Wear 1,508.6 1,585.7 5.1 244,295 263,814 8.0 Towels 597.0 578.0 -3.2 135,646 132,723 -2.2 Readymade 1,608.7 1,704.1 5.9 23,704 24,823 4.7 Garments Made-up 471.6 485.1 29.0 Nil Nil Nil articles Other Textile 755.2 660.5 -12.5 Nil Nil Nil Manufactures Petroleum C 128.9 139.2 8.0 Nil Nil Nil Group Petroleum 88.9 56.3 -36.7 248,692 152,992 -38.5 Crude Petroleum Top 11.0 32.5 2955.9 3,080 87,015 2725.2 Naphtha Other D 23,867.0 2,274.1 -4.7 Nil Nil Nil Manufactures Carpets, Rugs & 74.0 61.2 -17.3 1,372 1,322 -3.6 Mats Sports Goods 2346.0 225.2 -4.0 Nil Nil Nil Leather Tanned 267.8 252.4 -5.7 12,691 11,970 -5.7 Leather 396.4 371.7 -6.2 Nil Nil Nil Manufactures Surgical Goods 262.7 250.6 -46.0 Nil Nil Nil & Med. Inst Chemical & 588.5 621.5 5.6 Nil Nil Nil Pharma Pro. Engineering 134.3 126.0 -6.2 Nil Nil Nil Goods Cement 248.0 191.5 -22.8 4,555,239 3,644,625 -20.0 All Other 180.4 174.0 -3.5 Nil Nil Nil Manufactures All Other E 681.7 740.5 Nil Nil Nil Nil Items Source: Pakistan Bureau of Statistics, 2017 (Statistics, Pakistan Bureau of Statistics, 2017) *Provisional

Table 44: Major Exports (2010-16) (Million USD) July-March 2010- 2011- 2012- 2013- 2014- 2015- Commodity 2015- 2016- 11 12 13 14 15 16 16 17 Cotton 52.9 49.6 51.6 53.1 54.5 55.0 58.1 59.6 Manufacturers Leather* 4.4 4.4 4.7 5.1 4.8 4.9 4.7 4.5 Rice 8.7 8.7 7.8 7.6 8.5 8.8 8.8 7.7

45 How to Export - Pakistan

Table 44: Major Exports (2010-16) (Million USD) July-March 2010- 2011- 2012- 2013- 2014- 2015- Commodity 2015- 2016- 11 12 13 14 15 16 16 17 Sub-Total of three 66.0 62.7 64.1 65.8 67.8 687.0 71.6 71.8 Items Other items 34.0 37.3 35.9 34.2 32.2 31.3 28.4 28.2 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 *Leather & Leather manufactured Source: Pakistan Bureau of Statistics, 2017 (Statistics, Pakistan Bureau of Statistics, 2017)

3.1.5 Imports and Sectors of Imports with Largest Share

Pakistan imported USD 40.7 billion worth of goods from around the globe in 2016. Taking into account Pakistan’s population, this value translates to an estimated USD 200 in yearly product demand from every person in the country.

On the overall, imports rose by 28.7% since 2009 but declined by -7.6% from 2015 to 2016. Pakistan’s top 10 imports accounted for roughly three-fifths (59%) of the overall value of its product purchases from other countries. Amongst these, the manmade filaments had the fastest-growing increase in value, rising by 197.3% for the 7-year period starting in 2009. Cotton ranked second for improving import sales by 123.3%. Vehicles delivered the third-fastest gain by 108.2% and machinery including computers improved by 104.4%.

Table 45: Structure of Imports % July-March % Change July-March Particulars Change Quantity in 2015-16 2016-17 P* in Value 2015-16 2016-17 P* Quantity Total 32,445 38,504 19 Nil Nil Nil A Food Group 3,939 4,529 15 Nil Nil Nil Milk & Milk food 193 186 -4 53,423 66,831 25 Wheat Unmilled Nil Nil Nil Nil Nil Nil Dry Fruits 105 130 24 102,559 133,575 30 Tea 404 411 2 133,335 163,136 22 Spices 106 102 -3 111,713 120,976 8 Edible Oil (Soybeans & 1,392 1,457 5 2,163,812 1,980,012 -8 Palm) Sugar 5,041 3,949 -22 9,747 9,894 2 Pulses 444 722 62 695,898 956,376 37 Other food items 1,289 1,516 18 Nil Nil Nil B Machinery 4,322 6,465 50 Nil Nil Nil Group Power generating 1,341 2,367 77 Nil Nil Nil Machines Office machines 232 372 60 Nil Nil Nil Textile 332 401 21 Nil Nil Nil Machinery

46 How to Export - Pakistan

Table 45: Structure of Imports % July-March % Change July-March Particulars Change Quantity in 2015-16 2016-17 P* in Value 2015-16 2016-17 P* Quantity Const. & Mining 224 373 67 Nil Nil Nil Machines Aircrafts, Ships 474 331 -30 Nil Nil Nil and Boats Agriculture 62 84 36 Nil Nil Nil machinery Other Machinery 1,657 2,537 53 Nil Nil Nil Items C Petroleum 5,585 6,687 20 Nil Nil Nil Group Petroleum 3,750 4,846 29 6,957,006 10,767,078 55 Products Petroleum Crude 1,834 1,841 3 4,284,361 5,916,854 38 D Consumer 2,728 3,470 27 Nil Nil Nil Durables Road Motor 1,407 1,811 29 Nil Nil Nil Vehicles Electric Mach. & 1,320 1,659 26 Nil Nil Nil Appliances E Raw Materials 5,714 5,611 -2 Nil Nil Nil Raw Cotton 588 485 -18 325,134 283,648 -13 Synthetic Fiber 369 346 -6 1,811,498 185,158 -90 Silk Yarn (Synthetic & 468 486 4 211,489 247,303 17 Artificial) Fertilizer 640 479 -25 1,392,391 1,532,671 10 Manufactured Insecticides 116 111 -5 13,769 12,806 -7 Plastic Material 1,314 1,407 7 714,628 834,193 17 Iron & steel Scrap 777 766 -1 2,861,196 2,861,196 Nil Iron & steel 1,442 1,531 6 2,493,953 2,493,953 Nil F Telecom 10,468 1,029 -2 Nil Nil Nil G All Other Items 2,800 3,139 12 Nil Nil Nil *Provisional

Table 46: Pakistan - Brazil Bilateral Trade 2016 Total Trade Volume: 478 Million USD Pakistan’s Imports from Brazil 433 Million USD Soya beans 183 Cotton 105 Iron and Steel 37 Diesel, Fuel Pumps and Machinery 14 Paper and Paper board 12 Smart Cards 12 Chemical wood pulp 11 Soya bean oil 11

47 How to Export - Pakistan

Table 46: Pakistan - Brazil Bilateral Trade 2016 Total Trade Volume: 478 Million USD Pakistan’s Imports from Brazil 433 Million USD Plastics and Rubbers 6 Coffee, tea, Mate and spices 7 Re-factory Bricks, blocks, tiles 5 Others 30 Total 433

Table 47: Pakistan’s Export to Brazil - 2016 Pakistan’s Exports to Brazil 45 Million USD Cotton yarn, textile products (Home tax) 23 Medical and Manicure Instruments 10 Soccer Balls 3 Salt 2 Leather Garments and Gloves 5 Others 2 Total 45

3.1.6 Pakistan’s Foreign Trade and Growth

Over the past five years, Pakistan’s balance of trade has widened from USD 19.4 billion in 2011-12 to USD 23.8 billion in 2015-16. After growing steadily for three years from 2012 to 2014, exports began declining. Likewise, over the last three years, imports have been marginally decreasing even though the balance of trade continues to grow.

Table 48: Balance of Trade, 2012-17 (State Bank of Pakistan) Exports Growth Imports Growth Balance of Trade Year (Million USD) Rate (Million USD) Rate (Million USD) 2012-13 24,802 0.3 40,157 -0.5 -15,355 2013-14 25,078 1.1 41,668 3.8 -16,590 2014-15 24,089 -3.9 41,357 -0.7 -17,268 2015-16 21,972 -8.8 41,255 -0.2 -19,283 Until May 2017 19,785 -1.6 43,450 16.7 -23,665

3.2 Origin and Destination of Trade

3.2.1 Export Destinations

The following table shows the top export markets for Pakistani goods from 2014 to 2017.

Table 49: Major Export Destination Markets (2014-17) July to March 2014-15 2015-16 2015-16 2016-17 P* Country % % % % PKR. USD PKR USD PKR. USD PKR. USD Share Share Share Share USA 374.4 3.7 16 364.8 3.5 17 270.5 2.6 17 266.2 2.5 17 China 219.9 2.2 9 174 1.7 8 134 1.3 8 120.4 1.2 8

48 How to Export - Pakistan

Table 49: Major Export Destination Markets (2014-17) July to March 2014-15 2015-16 2015-16 2016-17 P* Country % % % % PKR. USD PKR USD PKR. USD PKR. USD Share Share Share Share Afghanistan 198.8 2.0 8 149.9 1.4 7 116.0 1.1 7 91.0 0.9 6 United 160.2 1.6 7 164.7 1.6 8 123.9 1.2 8 121.6 1.2 8 Kingdom Germany 119.0 1.2 5 118.0 1.1 5 87.0 0.8 5 92.5 0.9 6 UAE 102.9 1.0 4 85.5 0.8 4 63.9 0.6 4 58.3 0.6 4 Bangladesh 70.7 0.7 3 72.3 0.7 3 55.7 0.5 3 49.8 0.5 3 Italy 67.6 0.7 3 67.7 0.6 3 48.6 0.5 3 50.4 0.5 3 Spain 81.7 0.8 3 84.3 0.8 4 62.0 0.6 4 63.3 0.6 4 France 38.2 0.4 2 36.0 0.3 2 25.5 0.2 2 27.9 0.3 2 Others 964.1 9.5 40 849.6 8.2 39 636.7 6.1 39 639.0 6.1 40 Total 2,397.5 23.7 100 2,166.8 20.8 100 1,623.8 15.6 100 1,580.4 15.1 100 P*: Provisional Source: (Pakistan S. B., State Bank of Pakistan, 2017)(USD =PKR.101.29), FY 2016 (USD =PKR.104.23), ( July-March FY 2016 (USD =PKR.104.09)), (July-March FY 2017 (USD=PKR. 104.67)

Figure 20: Import and Export Pie Charts

Breakdown of Exports by Commodity Group 0.5

21.0 Agricultural products

Fuels and mining products 2.7

Manufactures

75.7 Other

Breakdown of Imports by Commodity Group

0.7 Agricultural products

16.2 Fuels and mining products

Manufactures 56.5 26.5

Other

49 How to Export - Pakistan

Breakdown of Exports by Destination

European Union (28) United States 30.1 36.8

China Afghanistan

16.6 Other 7.8 8.8

Breakdown of Imports by Origin China

25.0 United Arab Emirates

45.3 European Union (28)

13.0 Saudi Arabia, Kingdom of

9.7 6.8 Other

3.2.2 Origins of Imports

Given below are the amounts of imports and the percentage of each country’s exports as a percentage of Pakistan’s imports in the given fiscal years.

The pattern of imports into Pakistan has been fairly consistent. Hence the data given can be taken as representative of the last five years’ trading activity.

Table 50: Major Import Markets (PKR and USD Billion and Percentage Shares) July to March 2014-15 2015-16 Country 2015-16 2016-17 P % % % % PKR. USD PKR. USD PKR. USD PKR. USD Share Share Share Share China 1,053.0 10.4 23 1261.9 12.1 27 908.9 8.7 27 1,140.1 10.9 28 UAE 681.9 6.7 15 572.7 5.5 12 407.9 3.9 12 561.9 5.4 14 Saudi 365.5 3.6 8 237.2 2.3 5 187.1 1.8 6 157.5 1.5 4 Arabia Kuwait 250.9 2.5 5 139.5 1.3 3 101.5 1.0 3 105.7 1.0 3 Indonesia 209.6 2.1 5 222.7 2.1 5 164.0 1.6 5 167.4 1.6 4

50 How to Export - Pakistan

Table 50: Major Import Markets (PKR and USD Billion and Percentage Shares) July to March 2014-15 2015-16 Country 2015-16 2016-17 P % % % % PKR. USD PKR. USD PKR. USD PKR. USD Share Share Share Share India 172.2 1.7 4 185.8 1.8 4 139.2 1.3 4 122.3 1.2 3 USA 180.7 1.8 4 185.3 1.8 4 135.6 1.3 4 178.7 1.7 4 Japan 170.6 1.7 4 190.3 1.8 4 138.1 1.3 4 149.6 1.4 4 Germany 97.5 1.0 2 97.6 0.9 2 74.7 0.7 2 77.4 0.7 2 Malaysia 96.3 1.0 2 96.5 0.9 2 69.8 0.7 2 69.0 0.7 2 Others 1,366.0 13.5 29 1,469.2 14.1 32 1,051.1 10.1 31 1,289.0 12.3 32 Total 4,644.2 45.9 100 4,658.7 44.7 100 3,377.9 32.5 100 4,018.6 38.4 100

China clearly emerges as the strongest trading partner for Pakistan – in terms of both imports and exports.

3.3 Foreign Trade by Commodity Categories

3.3.1 Imports by Major Commodity Categories

The table below depicts Pakistan’s imports by major commodity categories over the past five years. The largest slice of imports is products related to fuels and lubricants.

Table 51: Imports by Major Commodity Categories (2011-2016) (Million USD) Commodity Group 2011-12 2012-13 2013-14 2014-15 2015-16 Machinery & Transport Equipment 7,224 7,466 8,829 9,747 11,421 Manufactured goods classified by 4,979 4,237 4,949 5,465 6,306 material Food, and live animals 1,853 1,815 2,202 2,677 2,913 Chemicals 6,582 5,919 6,886 7,278 7,209 Minerals, Fuel, Lubricants and 14,656 14,324 15,647 12,188 8,845 related items Edible Oils and fats 2,360 1,955 2,126 1,847 1,923 Others, including industrial raw 3,751 5,710 5,500 5,399 6,021 materials Total 41,406 41,427 46,139 44,600 44,639

3.3.2 Exports by Major Commodity Groups

Pakistan’s exports by major commodity categories over the past five years have been presented below. The largest slice of exports relates to cotton and textiles.

Table 52: Exports by Major Commodity Groups – (Million USD) Commodity Group 2011-12 2012-13 2013-14 2014-15 2015-16 Raw Cotton 427 142 213 143 76 Cotton Fabrics 2,251 2,478 2,840 2,375 2,201 Cotton Yard & Thread 1,686 2,086 2,064 1,803 1,279

51 How to Export - Pakistan

Table 52: Exports by Major Commodity Groups – (Million USD) Commodity Group 2011-12 2012-13 2013-14 2014-15 2015-16 Knitwear 1,823 1,880 2,346 2,330 2,349 Bed wear 1,601 1,645 2,191 2,037 2,008 Readymade Garments 1,330 1,420 1,504 1,784 1,988 Woollen Carpets and Rugs 104 109 126 113 94 Leather and leather products 411 461 563 474 361 Rice 1,903 1,777 2,220 1,972 1,853 Fish & Fish Preparations 295 293 378 339 324 Fruits & Vegetables 499 592 664 649 638 Sports Goods 312 308 371 328 323 Others including plastics and 9,330 9,440 10,416 8,769 7,354 pharmaceuticals Total 21,973 22,633 25,895 23,114 20,847

Figure 21: Sports Goods of Sialkot, Pakistan

52 How to Export - Pakistan

4. BRAZIL – PAKISTAN ECONOMIC RELATIONS

4.1 Bilateral Trade: Brazil - Pakistan Economic Relations

According to a research paper published by the Pakistan Business Council (PBC) in October 2016, the export potential of Pakistani products to Brazil is estimated at over USD 1.63 billion; yet the actual exports are at a level of USD 71 million only. Similarly there is a wide disparity between potential and actual imports from Brazil. Despite having the capacity to export over USD 1.63 billion worth of goods to Brazil, Pakistan’s exports to Brazil stand at a low USD 71 million, according to data accumulated in 2015. Like with many other countries, Pakistan’s exports to Brazil have remained range-bound (from USD 71 million to USD 93 million) for the last five years. In fact, exports in 2015 (USD 71 million) were the lowest since 2011, when the country exported goods worth USD 80 million.

4.1.1 Recent Trends

The following table displays the recent trends of the Brazilian economy according to OECD’s data.

Table 53: Indicators for Brazilian Exports (Billion USD) Years Export Import Balance of Trade 2012 243.33 223.74 19.59 2013 241.85 239.12 2.73 2014 225.01 229.04 -4.03 2015 190.85 171.82 19.03 2016 185.42 137.88 47.54

The Brazilian economy has consistently reported a positive balance of trade with the exception of 2014. However exports and imports have declined over the years even though, in 2016 the balance of trade has been the highest in the past five years.

The following table compares the magnitude of total Brazilian imports and the percentage of goods imported from Pakistan.

Table 54: Comparison of Brazilian Imports from Pakistan with World Description 2014 2015 2016 Brazil’s Imports from Pakistan (USD 92,407 70,843 45,066 Thousands) Brazil’s Imports from the World (USD 229,060,056 171,446,212 137,552,002 Thousands) Pakistan’s Exports to the World (USD 24,722,182 22,089,018 20,533,793 Thousands) Percentage of Pakistan’s Exports to Brazil out of Total Pakistani Exports 0.373% 0.32% 0.2195% (Percent) Percentage of Brazil’s Imports from Pakistan out of total Brazilian Imports 0.04% 0.041% 0.0327% (Percent)

53 How to Export - Pakistan

Percentage of Brazilian imports from Pakistan out of its total value of goods imported globally is almost negligible at 0.03-0.04% and Pakistan’s share in Brazilian imports has been declining over the years.

Table 55: Comparison of Brazilian Exports to Pakistan and World Description 2014 2015 2016 Brazil’s Exports to Pakistan (USD 163,224 297,853 433,362 Thousands) Pakistan’s Imports from the World (USD 225,098,405 191,126,886 185,235,399 Thousands) Percentage of Pakistan’s Imports from Brazil out of Total Pakistani Imports (USD 47,544,889 43,989,645 46,998,269 Thousands) Brazil’s Exports to the World (Percent) 0.343% 0.677% 0.922% Percentage of Brazil’s Exports to Pakistan 0.072% 0.1558% 0.2339% out of total Brazilian Exports (Percent)

The share of Brazilian imports out of Pakistan's total import bill increased up to almost 1% from 2014-2016. The percentage of Brazil’s exports to Pakistan out of its total export bill has also increased over time. However, the overall percentage still remains negligible at 0.2339%.

4.1.2 Breakdown of Bilateral Trade

The following graph depicts the volume of mutual trade between Pakistan and Brazil.

Figure 22: Pakistan - Brazil Bilateral Trade

$298m

$193m $177m

$148m $163m

$92m $80m $85m $92m $71m

2011 2012 2013 2014 2015

Pakistan's Exports to Brazil Pakistan'sPakistan's Importsimport from to Brazil Brazil

54 How to Export - Pakistan

4.1.3 Pakistan Exports to Brazil

Pakistan’s exports to Brazil are generally around 0.30% of its total exports. This low percentage clearly denotes a scope for growth in bilateral trade.

Table 56: Pakistani Exports to Brazil: Nature of Products (Million USD) 2016 2015 2014 2013 Product Group Export Export Export Export Exports Share Exports Share Exports Share Exports Share % % % % Basic Products Consumer 31.142 62.43 38.267 67.8 42.66 55.99 48.25 55.53 Goods Industrial Products Intermediate 11.745 23.54 9.089 16.10 20.94 27.48 26.35 30.33 Goods Capital Goods 6.261 12.55 8.658 15.34 11.58 15.19 9.84 11.32 Raw Materials 0.734 1.47 0.427 0.76 1.02 1.34 2.45 2.82 100 100 100 100

Table 57: Pakistani Exports to Brazil: All Major Products (Million USD) 2016 2015 2014 2013 Product Group Export Export Export Export Exports Share Exports Share Exports Share Exports Share % % % % All Products 49.882 100 56.442 100 76.20 100 86.89 100 Textile 28.368 56.87 33.034 58.53 48.81 64.06 50.32 57.91 Clothing Metals 4.043 8.11 4.169 7.39 4.18 5.49 5.94 6.84 Hides & Skins 3.128 6.27 3.306 5.86 2.77 3.63 5.19 5.97 Chemicals 0.259 0.52 0.397 0.3412 0.491 0.64 0.692 0.8 Miscellaneous 14.084 28.234 15.536 13.352 19.944 26.173 24.753 28.48

Table 58: Bilateral Trade between Pakistan and Brazil – up to October 2017 Bilateral Trade Million USD Brazil’s Export to Pakistan 540 Brazil’s Import From Pakistan 47 Total Trade Volume 587

4.1.4 Brazil’s Export to Pakistan

Brazil’s exports to Pakistan are given below. Pakistan imports less than 0.3% of its total import requirements from Brazil. This indicates considerable room for growth if concerted efforts are made in this direction.

55 How to Export - Pakistan

Table 59: Brazilian Exports to Pakistan: Nature of Products (Million USD) 2016 2015 2014 2013 Product group Imports Imports Imports Imports Imports Imports Imports Imports Share % Share % Share % Share % Basic Products Consumer 11.386 3.94 8.303 3.24 9.39 5.68 14.56 10.47 Goods Industrial Products Intermediate 117.462 40.74 114.08 43.95 102.75 62.25 50.85 36.39 Goods Capital Goods 26.481 9.18 23.915 9.21 14.03 8.49 12.16 8.75 Raw Material 132.963 46.00 113.26 43.61 38.94 23.58 62.13 44.39 100 100 100 100

Table 60: Brazilian Exports to Pakistan: All Major Products (Million USD) 2016 2015 2014 2013 Product Group Imports Imports Imports Imports Imports Imports Imports Imports Share % Share % Share % Share % All Products 341.582 100 259.58 100 165.17 100 139.96 100 Basic Products Vegetables 140.937 41.26 116.36 44.83 19.412 11.75 3.123 2.23 Textile & Clothing 24.901 7.29 26.024 10.03 26.786 16.22 54.202 38.72 Food Products 39.282 11.5 12.657 4.88 37.065 22.44 8.691 6.21 Industrial Products Metals 49.905 14.61 33.785 13.02 15.768 9.55 6.051 4.32 Wood 21.964 6.43 24.001 9.25 22.974 13.91 1.174 0.838 Mach & Elect 29.786 8.72 23.434 9.03 13.757 8.33 11.558 8.26 Plastic or Rubber 11.204 3.28 12.246 4.72 19.961 12.08 18.268 13.05 Chemicals 10.008 2.93 6.673 2.57 6.927 4.19 11.127 7.95 Miscellaneous 13.595 3.98 4.397 1.69 2.52 1.5 25.766 18.41

Table 61: Brazilian Trade with Pakistan Value in Annual growth Share in Equivalent Product 2016, in value Brazil's ad valorem Product Label Code USD between 2012- exports, tariff faced thousand 2016, %, p.a. % by Brazil Total All products 433,362 26 Nil Nil

Basic Products Animal or vegetable fats and 15 oils and their cleavage products; 10,965 197 1 8 prepared edible fats; animal 17 Sugars and sugar confectionery 10,626 304 Nil 18 09 Coffee, tea, maté and spices 6,513 13 Nil 10 69 Ceramic products 4,634 62 1 19 Footwear, gaiters and the like; 64 3,524 48 Nil 20 parts of such articles 10 Cereals 409 -13 Nil 10

56 How to Export - Pakistan

Table 61: Brazilian Trade with Pakistan Value in Annual growth Share in Equivalent Product 2016, in value Brazil's ad valorem Product Label Code USD between 2012- exports, tariff faced thousand 2016, %, p.a. % by Brazil Edible vegetables and certain 07 2,512 93 4 4 roots and tubers Preparations of cereals, flour, 19 starch or milk; pastry cooks' 118 -6 Nil 20 products 02 Meat and edible meat offal 55 -49 Nil 10 Articles of apparel and clothing 61 3 Nil Nil 20 accessories, knitted or crocheted Umbrellas, sun umbrellas, walking sticks, seat-sticks, 66 1 Nil Nil 20 whips, riding-crops and parts thereof Works of art, collectors' pieces 97 Nil Nil Nil 5 and antiques 01 Live animals Nil Nil Nil 3 Fish and crustaceans, molluscs 03 Nil Nil Nil 14 and other aquatic invertebrates Special woven fabrics; tufted 58 textile fabrics; lace; tapestries; Nil Nil Nil 20 trimmings; embroidery Musical instruments; parts and 92 Nil Nil Nil 11 accessories of such articles Preparations of vegetables, fruit, 20 Nil Nil Nil 19 nuts or other parts of plants Carpets and other textile floor 57 Nil Nil Nil 17 coverings Other made-up textile articles; 63 sets; worn clothing and worn Nil Nil Nil 17 textile articles; rags Dairy produce; birds' eggs; 04 natural honey; edible products Nil Nil Nil 19 of animal origin, not elsewhere 22 Beverages, spirits and vinegar Nil Nil Nil 57 Edible fruit and nuts; peel of 08 Nil Nil Nil 18 citrus fruit or melons Prepared feathers and down and 67 articles made of feathers or of Nil Nil Nil 20 down; artificial flowers; articles Articles of apparel and clothing 62 accessories, not knitted or Nil Nil Nil 19 crocheted Live trees and other plants; 06 bulbs, roots and the like; cut Nil Nil Nil 9 flowers and ornamental foliage

57 How to Export - Pakistan

Table 61: Brazilian Trade with Pakistan Value in Annual growth Share in Equivalent Product 2016, in value Brazil's ad valorem Product Label Code USD between 2012- exports, tariff faced thousand 2016, %, p.a. % by Brazil Preparations of meat, of fish or 16 of crustaceans, mollusks or other Nil Nil Nil 20 aquatic invertebrates Toys, games and sports 95 requisites; parts and accessories Nil Nil Nil 15 thereof Articles of leather; saddlery and 42 harness; travel goods, handbags Nil Nil Nil 20 and similar containers; articles 60 Knitted or crocheted fabrics Nil Nil Nil 20 Furniture; bedding, mattresses, 94 mattress supports, cushions and Nil Nil Nil 19 similar stuffed furnishings;

Industrial Products Oil seeds and oleaginous fruits; 12 miscellaneous grains, seeds and 183,312 713 1 3 fruit; industrial or medicinal 52 Cotton 104,886 4 8 14 72 Iron and steel 37,472 66 12

Machinery, mechanical 84 appliances, nuclear reactors, 14,441 Nil Nil 9 boilers; parts thereof Paper and paperboard; articles 48 of paper pulp, of paper or of 11,695 12 1 18 paperboard Electrical machinery and equipment and parts thereof; 85 11,673 105 Nil 14 sound recorders and reproducers, television . . . Pulp of wood or of other fibrous 47 cellulosic material; recovered 11,304 Nil Nil 4 (waste and scrap) paper or . . . 39 Plastics and articles thereof 3,268 -28 Nil 14 40 Rubber and articles thereof 3,024 2 Nil 13 Tanning or dyeing extracts; tannins and their derivatives; 32 1,580 2 Nil 13 dyes, pigments and other colouring Miscellaneous edible 21 1,573 31 Nil 19 preparations Tobacco and manufactured 24 1,555 -23 Nil 18 tobacco substitutes 29 Organic chemicals 1,426 1 Nil 6

58 How to Export - Pakistan

Table 61: Brazilian Trade with Pakistan Value in Annual growth Share in Equivalent Product 2016, in value Brazil's ad valorem Product Label Code USD between 2012- exports, tariff faced thousand 2016, %, p.a. % by Brazil Soap, organic surface-active agents, washing preparations, 34 868 2 Nil 18 lubricating preparations, artificial Lac; gums, resins and other 13 835 17 1 16 vegetable saps and extracts Residues and waste from the 23 food industries; prepared 816 24 Nil 12 animal fodder Optical, photographic, cinematographic, measuring, 90 711 -28 Nil 6 checking, precision, medical or surgical . . . 30 Pharmaceutical products 629 16 Nil 12 73 Articles of iron or steel 511 -41 Nil 17 Essential oils and resinoids; 33 perfumery, cosmetic or toilet 457 6 Nil 18 preparations Miscellaneous chemical 38 419 -3 Nil 10 products Wood and articles of wood; 44 345 25 Nil 9 wood charcoal 74 Copper and articles thereof 262 -5 Nil 7 Raw hides and skins (other than 41 139 -19 Nil 3 fur skins) and leather 76 Aluminium and articles thereof 123 16 Nil 13 Arms and ammunition; parts 93 120 -63 Nil 19 and accessories thereof Salt; Sulphur; earths and stone; 25 plastering materials, lime and 98 25 Nil 12 cement Miscellaneous articles of base 83 70 -30 Nil 20 metal Other vegetable textile fibres; 53 paper yarn and woven fabrics of 59 -29 Nil 12 paper yarn Inorganic chemicals; organic or inorganic compounds of 28 55 -31 Nil 5 precious metals, of rare-earth metals Articles of stone, plaster, 68 cement, asbestos, mica or 55 8 Nil 19 similar materials 70 Glass and glassware 53 -22 Nil 19

59 How to Export - Pakistan

Table 61: Brazilian Trade with Pakistan Value in Annual growth Share in Equivalent Product 2016, in value Brazil's ad valorem Product Label Code USD between 2012- exports, tariff faced thousand 2016, %, p.a. % by Brazil Tools, implements, cutlery, 82 spoons and forks, of base metal; 44 45 Nil 10 parts thereof of base metal Albuminoidal substances; 35 modified starches; glues; 27 7 Nil 14 enzymes Vehicles other than railway or 87 tramway rolling stock, and parts 27 Nil Nil 65 and accessories thereof Commodities not elsewhere 99 22 65 Nil specified Printed books, newspapers, pictures and other products of 49 1 -60 Nil 6 the printing industry; manuscripts 18 Cocoa and cocoa preparations Nil Nil Nil 16 Natural or cultured pearls, precious or semi-precious 71 Nil Nil Nil 3 stones, precious metals, metals clad Clocks and watches and parts 91 Nil Nil Nil 4 thereof Ships, boats and floating 89 Nil Nil Nil 7 structures Products of the milling industry; 11 malt; starches; inulin; wheat Nil Nil Nil 13 gluten Vegetable plaiting materials; 14 vegetable products not Nil Nil Nil 58 elsewhere specified or included Aircraft, spacecraft, and parts 88 Nil Nil Nil 3 thereof 80 Tin and articles thereof Nil Nil Nil 6 Fur skins and artificial fur; 43 Nil Nil Nil 17 manufactures thereof Man-made filaments; strip and 54 the like of man-made textile Nil Nil Nil 14 materials Wadding, felt and nonwovens; special yarns; twine, cordage, 56 Nil Nil Nil 15 ropes and cables and articles thereof 45 Cork and articles of cork Nil Nil Nil 11 55 Man-made staple fibres Nil Nil Nil 13

60 How to Export - Pakistan

Table 61: Brazilian Trade with Pakistan Value in Annual growth Share in Equivalent Product 2016, in value Brazil's ad valorem Product Label Code USD between 2012- exports, tariff faced thousand 2016, %, p.a. % by Brazil 79 Zinc and articles thereof Nil Nil Nil 4 Other base metals; cermet; 81 Nil Nil Nil 3 articles thereof Photographic or 37 Nil Nil Nil 5 cinematographic goods 50 Silk Nil Nil Nil 13 Manufactures of straw, of esparto or of other plaiting 46 Nil Nil Nil 20 materials; basket ware and wickerwork 75 Nickel and articles thereof Nil Nil Nil 8 27 Mineral fuels, mineral oils and products of their distillation; Nil Nil Nil 8 bituminous substances; mineral 31 Fertilizers Nil Nil Nil 3 Railway or tramway locomotives, rolling stock and 86 Nil Nil Nil 4 parts thereof; railway or tramway track fixtures Wool, fine or coarse animal hair; 51 Nil Nil Nil 9 horsehair yarn and woven fabric 26 Ores, slag and ash Nil Nil Nil 3 78 Lead and articles thereof Nil Nil Nil 4 36 Nil Nil Nil Nil 20 65 Headgear and parts thereof 20

Miscellaneous manufactured 96 Nil Nil Nil 19 articles Products of animal origin, not 05 Nil Nil Nil 3 elsewhere specified or included

Table 62: Brazilian Imports from Pakistan Equivalent Value in Annual growth Share in ad valorem Product 2016, in value Brazil's Product Label tariff Code USD between 2012- imports, applied by thousand 2016, %, p.a. % Brazil Total All products 45,066 -15 Nil Nil

Basic Products Articles of apparel and clothing 61 8,169 2 1 35 accessories, knitted or crocheted Articles of apparel and clothing 62 accessories, not knitted or 8,071 -6 1 35 crocheted

61 How to Export - Pakistan

Table 62: Brazilian Imports from Pakistan Equivalent Value in Annual growth Share in ad valorem Product 2016, in value Brazil's Product Label tariff Code USD between 2012- imports, applied by thousand 2016, %, p.a. % Brazil Optical, photographic, cinematographic, measuring, 90 6,527 -2 Nil 11 checking, precision, medical or surgical Other made-up textile articles; 63 sets; worn clothing and worn 4,491 -16 3 34 textile articles; rags Tools, implements, cutlery, 82 spoons and forks, of base metal; 3,329 -1 1 19 parts thereof of base metal Toys, games and sports 95 requisites; parts and accessories 3,062 -23 1 24 thereof Articles of leather; saddlery and 42 harness; travel goods, handbags 1,679 -16 1 26 and similar containers; articles Furniture; bedding, mattresses, 94 mattress supports, cushions and 1,221 4 Nil 18 similar stuffed furnishings; 10 Cereals 123 56 Nil 6 Carpets and other textile floor 57 117 -15 Nil 35 coverings Footwear, gaiters and the like; 64 112 -14 Nil 34 parts of such articles 17 Sugars and sugar confectionery 10 33 Nil 17 Miscellaneous edible 21 10 Nil Nil 16 preparations Special woven fabrics; tufted 58 textile fabrics; lace; tapestries; 10 -30 Nil 26 trimmings; embroidery Musical instruments; parts and 92 8 -11 Nil 16 accessories of such articles 09 Coffee, tea, mate and spices Nil Nil Nil 10 Works of art, collectors' pieces 97 Nil Nil Nil 4 and antiques Prepared feathers and down and 67 articles made of feathers or of Nil Nil Nil 16 down; artificial flowers; articles Clocks and watches and parts 91 Nil Nil Nil 20 thereof Live trees and other plants; 06 bulbs, roots and the like; cut Nil Nil Nil 3 flowers and ornamental foliage

62 How to Export - Pakistan

Table 62: Brazilian Imports from Pakistan Equivalent Value in Annual growth Share in ad valorem Product 2016, in value Brazil's Product Label tariff Code USD between 2012- imports, applied by thousand 2016, %, p.a. % Brazil Preparations of meat, of fish or 16 of crustaceans, mollusks or other Nil Nil Nil 16 aquatic invertebrates Tobacco and manufactured 24 Nil Nil Nil 16 tobacco substitutes Essential oils and resinoids; 33 perfumery, cosmetic or toilet Nil Nil Nil 17 preparations Preparations of cereals, flour, 19 starch or milk; pastry cooks' Nil Nil Nil 17 products Animal or vegetable fats and oils 15 and their cleavage products; Nil Nil Nil 10 prepared edible fats; animal Preparations of vegetables, fruit, 20 Nil Nil Nil 15 nuts or other parts of plants 02 Meat and edible meat offal Nil Nil Nil 10 01 Live animals Nil Nil Nil 2 Fish and crustaceans, mollusks 03 Nil Nil Nil 10 and other aquatic invertebrates 22 Beverages, spirits and vinegar Nil Nil Nil 20 60 Knitted or crocheted fabrics Nil Nil Nil 26 Umbrellas, sun umbrellas, walking sticks, seat-sticks, 66 Nil Nil Nil 20 whips, riding-crops and parts thereof Dairy produce; birds' eggs; 04 natural honey; edible products Nil Nil Nil 21 of animal origin, not elsewhere Edible vegetables and certain 07 Nil Nil Nil 9 roots and tubers

Industrial Products 52 Cotton 2,711 -41 2 17 Salt; Sulphur; earths and stone; 25 plastering materials, lime and 1,711 224 Nil 3 cement 40 Rubber and articles thereof 642 27 Nil 13 73 Articles of iron or steel 377 -2 Nil 14 Photographic or 37 367 Nil 11 cinematographic goods 55 Man-made staple fibres 320 -5 Nil 18 39 Plastics and articles thereof 317 -32 Nil 13

63 How to Export - Pakistan

Table 62: Brazilian Imports from Pakistan Equivalent Value in Annual growth Share in ad valorem Product 2016, in value Brazil's Product Label tariff Code USD between 2012- imports, applied by thousand 2016, %, p.a. % Brazil Miscellaneous manufactured 96 310 -32 Nil 17 articles Machinery, mechanical 84 appliances, nuclear reactors, 305 -17 Nil 12 boilers; parts thereof Products of the milling industry; 11 malt; starches; inulin; wheat 240 Nil Nil 12 gluten Tanning or dyeing extracts; tannins and their derivatives; 32 229 8 Nil 13 dyes, pigments and other colouring Products of animal origin, not 05 174 14 Nil 5 elsewhere specified or included Lac; gums, resins and other 13 110 -63 Nil 7 vegetable saps and extracts 70 Glass and glassware 79 17 Nil 12 26 Ores, slag and ash 39 Nil Nil 2 Edible fruit and nuts; peel of 08 35 Nil Nil 10 citrus fruit or melons Articles of stone, plaster, 68 cement, asbestos, mica or similar 29 -21 Nil 8 materials Natural or cultured pearls, precious or semi-precious 71 27 -40 Nil 9 stones, precious metals, metals clad Electrical machinery and equipment and parts thereof; 85 24 8 Nil 11 sound recorders and reproducers, television Vehicles other than railway or 87 tramway rolling stock, and parts 23 -34 Nil 27 and accessories thereof Man-made filaments; strip and 54 the like of man-made textile 20 -48 Nil 20 materials Oil seeds and oleaginous fruits; 12 miscellaneous grains, seeds and 14 Nil Nil 4 fruit; industrial or medicinal Paper and paperboard; articles 48 of paper pulp, of paper or of 7 28 Nil 13 paperboard 72 Iron and steel 5 -26 Nil 11

64 How to Export - Pakistan

Table 62: Brazilian Imports from Pakistan Equivalent Value in Annual growth Share in ad valorem Product 2016, in value Brazil's Product Label tariff Code USD between 2012- imports, applied by thousand 2016, %, p.a. % Brazil Wood and articles of wood; 44 3 20 Nil 9 wood charcoal 74 Copper and articles thereof 2 -24 Nil 9 76 Aluminium and articles thereof 1 Nil Nil 10 Miscellaneous articles of base 83 1 -47 Nil 16 metal 65 Headgear and parts thereof 1 -46 Nil 20 Impregnated, coated, covered or 59 laminated textile fabrics; textile 1 4 Nil 23 articles of a kind suitable 69 Ceramic products Nil Nil Nil 14 80 Tin and articles thereof Nil Nil Nil 8 Aircraft, spacecraft, and parts 88 Nil Nil Nil thereof Inorganic chemicals; organic or inorganic compounds of 28 Nil Nil Nil 7 precious metals, of rare-earth metals 29 Organic chemicals Nil Nil Nil 6 Vegetable plaiting materials; 14 vegetable products not Nil Nil Nil 6 elsewhere specified or included 78 Lead and articles thereof Nil Nil Nil 8 Manufactures of straw, of esparto or of other plaiting 46 Nil Nil Nil 12 materials; basket ware and wickerwork Soap, organic surface-active agents, washing preparations, 34 Nil Nil Nil 14 lubricating preparations, artificial Commodities not elsewhere 99 Nil Nil Nil specified Explosives; pyrotechnic products; matches; pyrophoric 36 Nil Nil Nil 12 alloys; certain combustible preparations Pulp of wood or of other fibrous cellulosic material; recovered 47 Nil Nil Nil 3 (waste and scrap) paper or others Other vegetable textile fibres; 53 Nil Nil Nil 20 paper yarn and woven fabrics of

65 How to Export - Pakistan

Table 62: Brazilian Imports from Pakistan Equivalent Value in Annual growth Share in ad valorem Product 2016, in value Brazil's Product Label tariff Code USD between 2012- imports, applied by thousand 2016, %, p.a. % Brazil paper yarn 79 Zinc and articles thereof Nil Nil Nil 9 Other base metals; cermet ; 81 Nil Nil Nil 4 articles thereof Residues and waste from the 23 food industries; prepared animal Nil Nil Nil 7 fodder Ships, boats and floating 89 Nil Nil Nil 16 structures 18 Cocoa and cocoa preparations Nil Nil Nil 17 30 Pharmaceutical products Nil Nil Nil 8 Wadding, felt and nonwovens; special yarns; twine, cordage, 56 Nil Nil Nil 21 ropes and cables and articles thereof Printed books, newspapers, pictures and other products of 49 Nil Nil Nil 4 the printing industry; manuscripts 75 Nickel and articles thereof Nil Nil Nil 9 45 Cork and articles of cork Nil Nil Nil 10 Arms and ammunition; parts 93 Nil Nil Nil 20 and accessories thereof Albuminoidal substances; 35 modified starches; glues; Nil Nil Nil 14 enzymes Fur skins and artificial fur; 43 Nil Nil Nil 18 manufactures thereof Railway or tramway locomotives, rolling stock and 86 Nil Nil Nil 14 parts thereof; railway or tramway track fixtures Miscellaneous chemical 38 Nil Nil Nil 11 products Raw hides and skins (other than 41 Nil Nil Nil 8 fur skins) and leather Wool, fine or coarse animal hair; 51 Nil Nil Nil 16 horsehair yarn and woven fabric Mineral fuels, mineral oils and 27 products of their distillation; Nil Nil Nil 0 bituminous substances; mineral 31 Fertilizers Nil Nil Nil 1 50 Silk Nil Nil Nil 24

66 How to Export - Pakistan

4.2 Brazilian Exports to the World

Table 63: Brazil’s Trade with the World – up to October 2017 Brazil’s Trade Million USD Brazil’s Export to the World 183,466 Brazil’s Import From the World 125,000 Total Trade Volume 308,466

Table 64: Brazilian Top 5 Trade Partners Market Trade (USD Million) Partner share (%)

China 35,608 18.63

United States 24,216 12.67

Argentina 12,800 6.70

Netherlands 10,044 5.26

Germany 5,172 2.71

China 30,719 17.92

United States 26,762 15.61

Germany 10,377 6.05

Argentina 10,285 6.00

Korea, Rep. 5,421 3.16 Source: www.tradingeconomics.com

Table 65: Brazilian Exports and Imports of Product Groups in 2016 Exports Imports Export Import Product Categories Product Production Weighted (USD (USD share (%) share (%) Average (%) Million) Million)

Raw materials 80,218 41.97 16,401 9.57 0.87

Intermediate goods 55,257 28.91 49,885 29.10 6.72

Consumer goods 24,432 12.78 45,619 26.61 11.53

Capital goods 27,921 14.61 58,791 34.29 9.63 Source: www.tradingeconomics.com

Table 66: Brazilian Exports to the World in 2016 Brazil Exports Billion USD 2016 Soya Bean 20 Ores and Concentrates 16 Meat and Meat Offal 13 Petroleum Products 12 Machinery (Parts of Turbojets) 12 Vehicles other than Railway and Tramway 11 Sugars and Confectionary 11 Iron and Steel 8 Waste of food Industry and Animal Fodder 6 Pulp of Wood 6 Coffee, tea and spices 5 Others 68 Total 185 Source: www.tradingeconomics.com

67 How to Export - Pakistan

Table 67: Brazilian Imports to the World in 2016 Brazil Imports Billion USD 2016 Machinery (bulldozer, angel dozer) 21 Electrical and electronic equipment 17 Petroleum Products (crude and Distilled) 15 Vehicles other than Railway, Tramway 10 Organic Chemical 8 Plastics and articles thereof 6 Fertilizer 6 Pharmaceutical Products 6 Medical Instruments 5 Chemical Products 4 Rubber and article thereof 2 Others 37 Total 138

Table 68: Top 5 Products Exports - Imports at HS 6 Digit Level - 2016 Exports Value in USD Soya beans 20,983,574.67 Petroleum oils and oils obtained from bituminous 11,781,324.15 Non-agglomerated iron ores and concentrates 10,378,928.22 Raw cane sugar, in solid form 5,901,103.83 Oil-cake and other solid residues of soya-bean 5,821,073.68 Imports Petroleum oils, etc. (excluding crude); preparation 8,628,594.20 Petroleum oils and oils obtained from bituminous 7,380,844.26 Automobiles with reciprocating piston engine 3,139,368.14 Monolithic integrated circuits, 2,949,274.29 Parts of electrical apparatus for line telephone 2,796,910.28

4.3 Brazilian Exports – Recent Performance

The exports from Brazil rose by 27.8% year-on-year to USD 17,686 million in April 2017, boosted by sales of basic products (29.7 percent), mainly iron ore (87.6 percent), crude oil (58.6 percent), copper (50.9 percent), pork (34.4 percent), soybeans (24.2 percent); coffee (12.6 percent), cotton (5.3 percent) and chicken meat (1.5 percent). Shipments also increased for manufactured (25.7 percent) and semi manufactured products (27.5 percent), namely hydrocarbons (161.6 percent), semi manufactured iron and steel (55.5 percent), sugar (44.7 percent), lumber (32.3 percent) and cargo vehicles (123.3 percent).

During the first four months of 2017, exports increased by 21.8% on a calendar- adjusted basis to USD 68.1 billion. Sales to China rose by 46.8 percent and accounted for nearly 25 percent of total exports. Exports in Brazil averaged 4,622.36 USD million from 1954 until 2017, reaching an all-time high of 26,158.51 USD million in August 2011 and witnessing a record low of 75.06 USD million in January 1965.

68 How to Export - Pakistan

Figure 23: Brazilian Exports

Brazilian Exports 22000

20085.0 20000

17571.1 17686.0 18000 16743.3 16989.1 MillionUSD 16330.5 16220.5 15801.9 15940.6 15472.0 16000

14911.5

13721.2 14000

12000 Jul 2016 Oct Jan Apr 2016 2017 2017

Source : WWW.Tradingeconomics.com | MINISTERIO DO DESENVOLVMENTO, INDUSRIA E COMERCIO EXTERIOR

Table 69: Brazilian Trade in 2016 Brazilian Trade Last Previous Highest Lowest Unit Balance of Trade 6,969 7,145 7,145 -4,066.52 USD Million

Exports 17,686 20,085 26,158.51 75.06 USD Million

Imports 10,717 12,940 23,061.08 67 USD Million

Current Account 1,152.80 1,377.10 3,007 -13,165.00 USD Million

External Debt 678,952.08 682,160.91 714,292.15 64,259.50 USD Million Current Account to -1.30 -3.32 1.80 -8.20 percent GDP

Terms of Trade 115.77 115.55 132.67 64.72 Index Points

Capital Flows 1,757 1,818.10 2,919.60 -13,168.80 USD Million Foreign Direct 5,577.40 7,119.10 20,427 -24.10 USD Million Investment

Remittances 193.40 206.20 386 70.80 USD Million

Gold Reserves 67.29 67.20 119.01 31.99 Tonnes

Crude Oil Production 2,730 2,609 2,730 330 BBL/D/1K

Tourist Arrivals 5,813 5,677 5,813 1,991 Thousand

Terrorism Index 1.74 2.21 2.69 0.00

Weapons Sales 109.00 38.00 269.00 1.00 USD Million

Brazil has an export-oriented economy, dependent on the shipments of raw material (46 percent of total exports) and manufactured goods (38 percent). The country exports mainly: soybeans and related soy products (15 percent of total exports); transport equipment and components (10 percent), oil and oil products (9 percent), meat (8 percent), iron ore (7 percent), chemical products (7 percent) and metal products (7 percent). Main export partners are China (19 percent of total exports), the United States (13 percent), Argentina (7 percent), the Netherlands (5 percent), Germany and Japan (3 percent each).

69 How to Export - Pakistan

Table 70: Brazilian Exports to Major Regions in 2016 Volume of Exports Country Share of Exports % (Million USD) Asia 73,731 40 Europe 41,141.92 22 Latin America & Caribbean 37,208 20 United States 23,299 13 Africa 7,798 4 Canada 2,366 1

Table 71: Brazilian Imports from Major Regions in 2016 Volume of Exports Region Share of Exports % (Million USD) Asia 47,212 34 Europe 36,049 26 United States 24,099 18 Latin America & Caribbean 22,502 16 Africa 4,599 3 Canada 1,866 1

Table 72: Pakistani Exports to Major Regions in 2016 Volume of Exports Country Share of Exports % (Million USD) Asia 7,699 37 Europe 7,168 35 United States 3,429 17 Africa 1,287 6 Latin America & Caribbean 399 2 Canada 220 1

Table 73: Pakistani Imports from Major Regions in 2016 Volume of Exports, Region Share of Exports % (Million USD) Asia 35,089 75 Europe 6,109 4 United States 2,006 1.5 Africa 1,620 1.2 Latin America & Caribbean 905 1 Canada 771 1

4.4 Bilateral Investment

The quantum of bilateral investment between Brazil and Pakistan is negligible. While no precise figures are available from any reliable sources, the only reciprocal investment is in the form of opening trade offices.

70 How to Export - Pakistan

Figure 24: Three Dimensional Bubble Chart - Growth of National Supply and International Demand for Products Exported by Brazil

Annual increase of Brazilian share in world exports between 2012-2016, %

4.4.1 Highlight Opportunities

These may be considered in two stages: addressing net negative exports and improving net positive exports.

4.4.2 Net Negative Exports

Below are exports from Brazil that result in product trade balance deficits. These negative net exports reveal product categories where foreign spending on Brazil’s goods trail Brazilian importer spending on foreign products.

1. Electrical machinery, equipment: USD13.7 billion (Up by 32.8% since 2009) 2. Machinery including computers: USD 9.5 billion (Down by -26.9%) 3. Organic chemicals: USD 6.5 billion (Up by 43.6%) 4. Fertilizers: USD 5.8 billion (Up by 58.8%) 5. Pharmaceuticals: USD 5.2 billion (Up by 52.6%) 6. Optical, technical, medical apparatus: USD 3.9 billion (Down by -6.7%) 7. Mineral fuels including oil: USD 3.6 billion (Up by 37.2%) 8. Other chemical goods: USD 3 billion (Up by 75.8%) 9. Plastics, plastic articles: USD 2.4 billion (Up by 21%) 10. Manmade filaments: USD 952 million (Up by 26.7%)

71 How to Export - Pakistan

Brazil has high negative net exports and therefore deep international trade deficits for electronic equipment including consumer electronics. These cash flow deficiencies clearly indicate Brazil’s competitive disadvantage in the international electronics market, but also represent an opportunity to improve its position in the global economy through focused innovations.

4.4.3 Net Positive Exports

The following types of Brazilian product shipments represent positive net exports. Brazil achieved a USD 47.7 billion trade surplus in 2016.

1. Oil seed: USD 19.3 billion (Up by 68.8% since 2009) 2. Ores, slag, ash: USD 14.9 billion (Up by 9%) 3. Meat: USD 12.4 billion (Up by 26.8%) 4. Sugar, sugar confectionery: USD 10.5 billion (Up by 23.4%) 5. Iron, steel: USD 6.5 billion (Up by 44.1%) 6. Wood pulp: USD 5.3 billion (Up by 72.2%) 7. Food industry waste, animal fodder: USD 5.3 billion (Up by 12.1%) 8. Coffee, tea, spices: USD 5.1 billion (Up by 30.5%) 9. Aircraft, spacecraft: USD 3.1 billion (Up by 58.5%) 10. Gems, precious metals: USD 3 billion (Up by 109.1%)

Brazil has highly positive net exports in the international trade of oil seed, which is often used for vegetable oil and related products. In turn, these cash flows indicate Brazil’s strong competitive advantage under the oil seed product category.

4.5 Principal Bilateral Economic Agreements with Brazil

Both Pakistan and Brazil are signatories to several international agreements under the auspices of the UN and trade bodies including WTO and ILO. A bilateral Trade Agreement was signed in 1982.

4.6 Credit Lines from Brazilian Banks

Due to the nature of current bilateral trade, importers and exporters in each country are depending on credit lines extended to them by banks in their own country. Currently, no formal credit lines are available to any Pakistani firm neither from any Brazilian bank, nor to a Brazilian firm from a Pakistani bank.

However, such credit lines are generally of relevance if the exports are of capital goods nature like industrial machinery. According to The Federation of Pakistan Chambers Of Commerce and Industry (FPCCI), there are no formal credit lines available to any specific member of FPCCI in Pakistan from any Brazilian bank.

72 How to Export - Pakistan

4.7 Opportunities for Brazilian Investors in Pakistan

Appropriate Government policies can expedite the process of tapping into maximum opportunities and potential trade. It is through such policies that the trade volume of each commodity can easily be increased in either direction.

Opportunities for Brazilian investors exist in Pakistan in the following sectors:

a. Agricultural sector, mainly dairy and meats. b. Livestock and poultry: export of parent and grandparent stocks c. Fisheries: There is vast potential for investing in fishing industries as world demand for fish and fish products is increasing. d. Industrial and infrastructural sectors, as Pakistan is still developing these fields. e. Power and energy: Pakistan is short of energy but has huge coal reserves. She can use Brazil’s expertise and equipment. f. IT and Telecom sectors can use Brazilian expertise and equipment. g. Textiles: Pakistan can be used for vendor-manufacturing of textiles to boost Brazilian exports of these products to those parts of the world that Pakistan cannot reach independently. h. Health care: Brazil can export pharmaceutical and other health care products and services to Pakistani hospitals. i. Brazilian companies can open retail stores or grant franchises to Pakistani firms for consumer products of general nature including but not limited to luxury items, clothing, footwear, fashion-wear and fast foods. j. Financial services: Pakistan is a capital starved country; Brazilian banks can fill this gap by providing financial and consultancy services.

4.7.1 Brazil and Pakistan – Bilateral Trade Opportunities

During 2016, Brazil and Pakistan’s bilateral trade was approximately USD 478 million. This value could be much higher if the actual potential that exists between both countries is reached and challenges such as language barriers and long distances are addressed.

Major Brazilian exports to Pakistan include soybeans and related products, cotton, injection pumps for tractors, plastic, iron and steel. Major Brazilian imports from Pakistan include textile items, surgical items, soccer balls and manicure instruments.

Promoting São Paulo as the hub of South America can attract Pakistani companies for enhancing trade & investment with Brazilian companies. With more than 20 million inhabitants, the city of São Paulo’s GDP alone is 388 billion dollars. Likewise promoting Pakistan as a rich consumer market with increasing incomes, a gateway to the landlocked Central Asian Republics and Afghanistan, and an opportunity to become part of the development of CPEC, can be of interest to Brazilian investors. Furthermore, Pakistan is in dire need of developing its energy sector to fuel the

73 How to Export - Pakistan

economy. Brazilian experience in the energy sector including renewable energy like wind, solar and coal can be of interest to Pakistan.

Agriculture is the backbone of Pakistan’s economy but yields and productivity in the sector have declined when compared to regional countries. One of the major impediments is the lack of Research and Development, and of the adoption of new technologies. Over the years, Brazil has improved its agricultural productivity through modern technology. Pakistan would modernize its agriculture sector by enhancing cooperation with the Brazilian agricultural sector.

Brazilian expertise can also be introduced in the mining and infrastructure sectors. Although Chinese companies are entering both sectors, the magnitude of the domestic and international demand indicates there are ample opportunities for Brazilian companies to provide their technical expertise in the processing industry.

Pakistan is endowed with natural resources and has developed a large SME base. Yet all sectors are operating at a very rudimentary level and consequently, cannot compete internationally. Brazilian experience in this realm of business models can be replicated in Pakistan. Their product development, diversification, and adaption of the latest technologies are worth consideration.

Brazilian companies have great potential to collaborate with counterparts in Pakistan. Potential sectors for joint ventures are:

1. Gems and Jewellery 2. Precious and Semi-Precious stones 3. Wood Furniture and handicraft 4. Sports and hunting arms 5. Marble and Granite 6. Cutlery decorative knives 7. Surgical instruments, dental and medical equipment 8. Traditional fabrics and article of hand embroidery 9. Leather products 10. Dairy processing and cheese making 11. Livestock and Halal meat processing and export 12. Agro Food Processing 13. Honey 14. Small Hydro-power units 15. Solar systems for irrigation and agriculture 16. Pharmaceutical

The map in next page gives a snapshot of the Pakistani industry and its spread across the country.

74 How to Export - Pakistan

Figure 25: Main Industries in Pakistan by Region

75 How to Export - Pakistan

5. GENERAL RECOMMENDATIONS TO BRAZILIAN COMPANIES

5.1 About the Country

Pakistan is a hospitable and accommodating country. Excellent amenities are available for investors in most of its industrial and commercial centres. Compared to Europe, the general cost of living is low. Hence, making visits to Pakistan to explore business opportunities is not an expensive initiative. A summary of some basic facts has been presented below:

Customs and Traditions in Pakistan Regarding Trade

Often, people in Pakistan rely more on their cultural ways of resolving conflicts rather than moving towards courts, where it takes a long time. It is advisable to involve a trusted person to negotiate for resolving a conflict. It is imperative that a Brazilian exporter to Pakistan is aware of the cultural norms and of possible ways in which a conflict can be solved according to local customs.

Pakistan is a religiously sensitive country, where a large number of religious groups and minorities exist. It is also imperative not to indulge in any discussions that might become sensitive to people.

It is always important to sign documents for all services acquired, particularly trade- related transactions in accordance with local law. Sections should be added in contracts regarding breach of contract, conflicts and disputes, identification of a forum to resolve disputes, clear deliverables of contract, dates, the penalty in case of violation etc. It is also important not to transfer complete amounts before transactions/deliverables/consignments are safely concluded.

Pakistan has numerous traditional holidays, festivals and special days, during which sales increase across the country. It is important for the Brazilian exporter to capitalize on these days, by preparing for their sales before these specific days. These days include the two Eids, the Holy month of Ramadan, Independence day, the Birthday of the Holy Prophet (PBUH) etc.

Pakistanis like the rest of Asian countries are accustomed to personal contacts. It is therefore recommended to keep contact through telephone or social media with people in Pakistan including public officials, as much as possible.

5.2 Suggestions for Brazilian Exporters

a. Study about the country before planning a business venture or a visit.

b. Visit Pakistan with a concrete plan and collect primary data related to the business areas of interest.

76 How to Export - Pakistan

c. Operate through a distributor or agent depending on the nature of products and services because Pakistan is a slow but long-term market. Keeping in view long-term interests in Pakistan, local distributors or agents can help Brazilian businessmen to establish an office in Pakistan. This is highly recommended to ensure physical presence and visibility in the local market.

Depending on the type of products or services, Karachi, Lahore and Islamabad are suggested locations for opening a Representative Office (RO). Qualified, experienced and hardworking English speaking staff is available at all levels at reasonable remuneration packages to assist the start-ups and a successful business execution. Human Resources websites like Rozee.pk, Brightspyre.com and Mustakbil.com can be reliable sources for identifying staff. Skype-based interviews can be done with them.

Formalities required to start an office in Pakistan are minimal, except in cases where manufacturing facilities are involved. However, this does not entail serious impediments and a consultant can handle the whole process.

d. Opening an office in Pakistan can offer additional advantages such as being able to explore the oil-rich Middle East market and Asian regions such as South East Asia, Central Asia and China. Additionally, with CPEC about to become operative, opportunities await companies who have offices in Pakistan as this will become a gateway to Asia.

e. Identifying and selecting relevant staff is a key factor to a good start and to the execution of a business. Assistance can be solicited from the Embassy of Brazil in Islamabad53 and from the Brazil-Pakistan Chamber of Commerce and Industry (BPCCI)54. The chances of success are greatly improved with more formal and personal contact. Asian countries are culturally oriented towards personal relationships.

f. Explore new clients in the existing product lines and other areas for business. Such opportunities are generally not visible from a distance. Brazil already exports dairy products, edible vegetable seeds, soya beans and soya meal, coffee, spices, oil seeds and lac gum to Pakistan. A local office or a permanent representative based in Pakistan will expand the customer base or the product lines.

g. Explore opportunities in the infrastructural and power sectors. Pakistan is a developing country and has untapped potential in these sectors.

53 Commercial Section, Embassy of Brazil, Islamabad, House No.01, St.72, F-8/3, Islamabad-Pakistan, Tel: +92-51-2287189- 5, Email: [email protected] 54 Brazil Pakistan Chamber of Commerce & Industry (BPCCI), Av. Montemagno, 2676, CEP 03371-000, São Paulo - SP – Brazil, Tel: 0055-11-3181-5511 E: Info@ brazilpakistan.org Web:www.brazilpakistan.org

77 How to Export - Pakistan

5.3 Market Access

There are no preferential treaties that link Pakistan with Brazilian businesses. However, this is not a major handicap. While efforts at Government-to-Government level can continue to improve the situation, well-established Brazilian companies can conduct business in Pakistan on a competitive edge.

Import procedures, tariffs and processes are fairly commonplace. No specialized knowledge is required for businesses in Pakistan. There are hardly any rules and regulations that are peculiar to Pakistan or may be imposed on Brazilian companies in particular. Any export house in Brazil should be able to conduct business with Pakistan through established norms of business like a letter of credit (L/C) or contract-based sales.

Importers in Pakistan are generally responsible for fulfilling import formalities. Brazilian exporters would not normally be required to go out of their way in this regard.

As is the case in international market places, the chances of success can be improved significantly through the right selection of a local representative.

5.4 Principal Segments

Brazilian businessmen can explore the following potential sectors in Pakistan:

a. Infrastructure: supply of machinery, technology etc. b. Dairy Industry: milk processing, by-products and powder making technology c. Meat and Poultry Industry: supply of parent and grandparent flocks; processed frozen meats, etc. d. Edible Oil industry: Pakistan is a big market for edible and oil bearing seeds. e. Energy sector: Supply of equipment relating to power generation, transmission and distribution.

5.5 Getting Information about Pakistan

In Annexes 9.3 and 9.4 to this report are the e-mail and website addresses of the organizations and bodies that can be contacted to get the latest statistical and other information about conducting business in Pakistan. These include Governmental Ministries; trade related Governmental corporations and agencies; private sector associations like Chambers of Commerce and Industries etc.

5.6 Delivery of Samples and Publicity Material to Local Importers

While this is a common way of reaching clients, its appeal is much less than a personal contact. It may be more beneficial if importers are contacted through a

78 How to Export - Pakistan

representative, or in a visit to Pakistan. Though Chambers of Commerce and the Pakistani Embassy in Brazil are available for support, a personal contact strategy is the most effective.

5.7 Shipping Documents and Other Requirements

The export process for Pakistan is not very different from export processes to other developing countries. Typically, it involves the following documents:

a. Three sets of negotiable Bill of Lading b. Manually signed commercial invoice c. Packing List / Product literature where relevant d. Beneficiary Certificate e. Insurance Certificate f. Certificate of Origin (only for certain products) g. Bill of Exchange

There is no import licensing regime for normal imports into Pakistan.

5.8 Shipping Insurance

Due to long distance and other factors, it is advisable to opt for a shipping insurance for the commodities, in case the commodities face any type of damage or are lost in transit.

Different companies are providing shipping insurance in Pakistan, which can be helpful. These include but are not limited to Jubilee General Insurance, Costa Logistics, EFU General Insurance, Adamjee Insurance, Allied Xpert Logistics etc. Others can be explored using the facilitation services of The Trade Development Authority of Pakistan (TDAP).

5.9 Shipping Supervision and Oversight

For shipping supervision and oversight, it is important to engage an agent that looks after the shipments through all stages of transport. Pakistan Ships Agent Association (PSAA) overall regulates the work of shipping agents and also provides the list of shipping agents55. The agents provide end to end shipment supervision and oversight and also provide specific services within this domain.

5.10 Import Financing

Different banks and financial institutions provide import financing facilities mostly under short-term finance packages. This includes running finance, short-term trade facilities, a letter of credit (foreign and inland), financing against imported merchandise, Finance Against Trust Receipt (FATR) as well as other forms of long

55 http://www.psaa.org.pk/listofmembers.php

79 How to Export - Pakistan

term exposure. The majority of such financing require the applying party to fulfil basic qualifications of legal existence, some form of financial strength of the company etc. Banks that provide such facilities include Standard Chartered Bank, Faysal Bank, Summit Bank, MCB, Habib Bank Ltd. and other banks.

5.11 Trade Disputes and Arbitration

Pakistan has recently established an organization focusing trade disputes and arbitration. The Trade Dispute Resolution Organization (TRDO) was established under the Strategic Trade Policy Framework (STPF) 2012-15 as an attached department of the Ministry of Commerce, to assist the exporters and importers against fraud in international trade and to improve the level of trust of foreign buyers. Its mandate is to:

1. Take swift actions for early resolution of trade disputes 2. Act as a bridge between bodies responsible for standards and quality 3. Establish a database of “High Risk” places with high prevalence of disputes and frauds in international markets 4. Improve quality standards 5. Ensure that foreign importers are not cheated by Pakistani exporters 6. Prepare a database of exporters with confirmed cases of disputes 7. Provide assistance to Pakistani exporters who are defrauded in international trade 8. Educate and train exporters and importers to avoid disputes

Apart from this, the Trade Development Authority of Pakistan (TDAP) and all Chambers of Commerce also facilitate during the disputes, providing opportunities of negotiation and arbitration. In extreme cases, the cases are referred to trade related regulatory authorities.

5.12 Assistance from the Commercial Section of the Embassy of Brazil

In case of any particular issue faced by a Brazilian business person, the commercial section of the Embassy of Brazil comes in to assist. The role of the Economic and Commercial Section of the Embassy of Brazil in Pakistan includes:

1. promoting bilateral economic and trading development between Pakistan and Brazil; 2. negotiating with Pakistani departments related to foreign trade and economic issues on behalf of Brazilian Government; 3. promoting and introducing foreign trade and economic policies of Brazil; 4. providing consultative service on import and export business for business circles from both Pakistan and Brazil; 5. helping resolving commercial disputes between enterprises from Pakistan and Brazil;

80 How to Export - Pakistan

6. sending useful information and invitation letters to Pakistani companies on all kinds of exhibitions and fairs in Brazil. The contact details are provided in the Annex 9.2.

5.13 Most Convenient Distribution Channel

It is advised to set up an office in Pakistan, or to appoint a representative in the country. This strategy is helpful for both Business to Business (B2B) as well as from the consumer products point of view. However, if it is not possible to set up an office or appoint a representative, direct approaches can be made through the relevant industrial/commercial association. Details of all such trade associations can be found in the Annex 9.4.

5.14 Product Promotion

Karachi Expo Centre56 and Lahore International Expo Centre57 offer international exhibition space and facilities.

Other related information about trade in Pakistan can be obtained from the following links:  www.eventseye.com/fairs/c1_trade-shows_pakistan.html  www.10times.com/pakistan/tradeshows  www.tdap.gov.pk/domestic_exhibitions]  www.ecgateway.net/ecgevents.htm  www.exhibitioninpakistan.com  www.pogeepakistan.com

There are sector-specific and general exhibitions to choose from. It is the most effective and economical way to know about a product’s potential, market size and competition. It is also a convenient way to find agents/distributors who can help Brazilian investors learn about competitor products in the market.

5.15 Consulting Services

There is no dearth of consultants that can be approached to prepare feasibility or viability reports for Brazilian exporters. However, different types of businesses demand different types of consultants. The Embassy of Brazil in Pakistan can extend a helping hand in this regard. Chambers of Commerce and Industry in each city can also facilitate identifying relevant consultants for each type of service.

5.16 Local Practices and Language

English is the business and official language and is widely understood by most businesses and the corporate world in Pakistan. Governmental procedures are still

56http://www.tdap.gov.pk/karachi-expo-center.php (Pakistan T. D.) 57http://www.expolahore.com/new/ (Centres)

81 How to Export - Pakistan

based on old British systems. Negotiations, correspondence, agreements and proposals all need to be undertaken in English. Very few people understand the Portuguese language, which is why it may be necessary to have a local representative or office in Pakistan.

5.17 Visiting Pakistan

A visa is required for business visits to Pakistan and is fairly easily available. Duration of the visa is generally of one month, which is quite adequate for common business purposes. A regular traveller could possibly obtain a multiple entry visit visa. There are a number of international and local hotels that are listed at various travel websites. Booking a hotel room is no problem. A number of airlines touch Pakistan from the Americas as well as Europe, Australia, Africa and Asia. It is most convenient to reach Pakistan through a Middle Eastern airline. Information on the connectivity of flights between Brazil and Pakistan is in the Annex 9.21.

CPEC, with its USD 56 billion investment portfolio, is going to create enormous opportunities for the global corporate enterprises. The country has a liberal trade and investment regime. In this backdrop, collaboration with Pakistani businesses would give Brazilian companies a potential window of opportunity to enter a market of more than a billion people.

The Pakistan-Brazil bilateral trade has still been hovering around USD 500 million, which is far less than the actual potential of both countries. Brazilian expertise in mining, information technology, dairy farming, livestock, renewable energy and infrastructure sectors is much needed in Pakistan. Likewise Pakistani products including textiles, bed-linen, garments, marble, leather and leather products, pharmaceutical, surgical instruments, precious and semi-precious stones, and agro- food products including rice, pulses, fruits and vegetables can find an attractive market in Brazil.

5.18 Professional Assistance

Foreign firms can easily seek assistance from the credible Government offices listed in the Annex 9.2. The formal procedure would entail an email or phone call, followed by scheduling an appointment whereby the Government offices would facilitate businessmen promptly. For investment-related assistance, the Board of Investment can be contacted at www.boi.gov.pk; the Trading Corporation of Pakistan can be contacted at www.tcp.gov.pk; similarly for province-specific assistance, the Punjab Board of Investment and Trade (www.pbit.gop.pk) and the Sindh Board of Investment (www.sbi.gos.pk) can be contacted.

82 How to Export - Pakistan

6. MARKET ACCESS

6.1 Tariff System

In Pakistan, the tariff system is managed and controlled by the National Tariff Commission (NTC). It is an autonomous investigation authority of the Government of Pakistan, on trade and tariff matters. This Commission administers trade remedy laws against dumped and subsidized imports of goods damaging Pakistan's domestic industry. It also conducts safeguard investigations against a surge in imports. All such proceedings are carried out in conformity with a rule-based international trading system. The Commission also advises the Government on issues related to Pakistan's industry competitiveness, promotion of exports and customs tariff rationalization.

The functions of the Commission are to advise the Federal Government on:

1. Tariff and other trade measures to: i. Provide assistance to the domestic industry; and ii. Improve the competitiveness of the domestic industry. 2. Trade remedies actions being faced by domestic producers and exporters; 3. Rationalization of tariff and proposals for tariff reform; 4. Removal of tariff anomalies; and 5. Any other matter relating to tariff or trade measures that the Federal Government may refer to the Commission.

Where the Federal Government has adopted the recommendations of the Commission in whole or part, the Commission periodically reviews the effect of such recommendations and in consequence of the review, gives further recommendations to the Federal Government.

The Commission advises the domestic exporters and producers facing trade remedy investigations abroad. The Commission assists the Federal Government at the World Trade Organization (WTO) dispute settlement body in matters pertaining to the Trade Remedy Laws, WTO Covered Agreements and disputes under other trade agreements.

6.2 Tariff Structure

In Pakistan, the Customs Act of 1969 provides the basic laws to govern trade. The Customs Territory of the goods imported into Pakistan is defined in the following context and customs duties are levied at rates prescribed from time to time by the competent authority, except in cases which have exemptions or subsidies:

 Goods imported into Pakistan;

83 How to Export - Pakistan

 Goods brought from any foreign country and brought into Pakistan to any customs station, and  Goods brought in bond from one customs station to another.

6.2.1 Regulatory Duty

The Federal Government levies a regulatory duty on all or any of the goods imported or exported, which is specified in the website of FBR58 for each type of commodity and goods. These are subject to limitations, restrictions or other factors as authority deems fit to impose. The regulatory duty shall be in addition to any duty imposed under any other law for the time being in force and shall be levied on and from the day specified by the authority.

6.2.2 Additional Customs Duty

The Federal Government may levy an additional customs duty on some imported goods as may be specified in their notifications, at a rate not exceeding 35 percent of the value of such goods.

Special customs duty is imposed on imported goods similar to those being produced in Pakistan; this is levied at a rate not exceeding 15% of the Federal Excise Duty (FED). The cumulative customs duty will not exceed rates agreed by the Government of Pakistan under multilateral trade agreements.

If a country falls under the umbrella of a free trade agreement or any other preferential agreement, which allows it to pay rates lower than those specified in the First Schedule, the importer has to make a claim at the time of the importation, supported by documentary evidence. The Federal Government may impose and levy fee and service charges for examination, scanning, inspections, sealing and de- sealing and valuation check.

The Board of Investment (BoI) has the power to allow delivery of certain goods without payment of duties and to allow repayment of duties on goods. This is done under special cases and only the Board has the authority to approve it under the recommendation from the Government.

The Board can also defer the collection of duties; a surcharge not exceeding Karachi Inter Bank Offer Rate (KIBOR) plus three per cent per annum shall also be payable on the deferred amount. If goods produced or manufactured in and exported from Pakistan are subsequently imported into Pakistan, such goods shall be liable to customs-duties. Imported machinery (which is temporarily exported without being altered) can be re-imported without payment of custom duties.

58www.fbr.gov.pk

84 How to Export - Pakistan

6.2.3 Classification of Goods

The Customs Code of Pakistan provides a unique nomenclature and Harmonized System Codes (HS) code for each item imported from all over the world. For most of the items the local nomenclature is the same as defined in the Customs Code. However, there are certain items which are referred to in the Customs Code with their technical specification or as defined in the product literature, whereas in the local market they are called by their ordinary name or abbreviation.

Pakistani Customs follow the HS Code (Harmonized System Codes) or the PCT Codes (Pakistan Customs Tariff Codes) for Classification of Goods. These codes consist of eight digits, where the first two represent the Chapter and the second two represent the Sub-Chapter and after the decimal place four digits represent the code of the item.

The Federal Board of Revenue (FBR) has classified goods in the First Schedule, where the following classes are notified:

Section 1: Live animals and animal products Section 2: Vegetable products Section 3: Animal or vegetable fats and oils and their cleavage products Section 4: Prepared food stuff, beverages, vinegar and spirits, tobacco and manufactured tobacco substitutes Section 5: Mineral products Section 6: Products of chemical or allied industries Section 7: Plastic, rubber and particles thereof Section 8: Raw hides and skins, leather, fur skins and articles thereof; saddler and harness; travel goods, handbags and similar containers; articles of animal guts (other than silk worm gut) Section 9: Wood and articles of wood; wood charcoal; cork and articles of cork; manufactures of straw, of esparto or of other plaiting materials; basket ware and wickerwork. Section 10: pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard; paper and paperboard and articles thereof. Section 11: Textiles and textile articles Section 12: Footwear, headgear, umbrellas, sun umbrellas, walking-sticks, seat- sticks, whips, riding-crops and parts thereof; prepared feathers and articles made therewith; artificial flowers; articles of human hair Section 13: Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware

85 How to Export - Pakistan

Section 14: Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof, imitation jewellery; coin. Section 15: Base metals and articles of base metal Section 16: Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles Section 17: Vehicles, aircraft, vessels and associated transport equipment Section 18: Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; clocks and watches; musical instruments; parts and accessories thereof. Section 19: Arms and ammunition; parts and accessories thereof. Section 20: Miscellaneous manufactured articles Section 21: Works of art, collectors' pieces and antiques

6.2.4 Import Tariff Structure in Pakistan

Import duty and taxes are due when importing goods into Pakistan whether by a private individual or a commercial entity. The valuation method is CIF (Cost, Insurance and Freight), which means that the import duty and taxes payable are calculated on the complete shipping value, which includes the cost of the imported goods, the cost of freight, and the cost of insurance. However, import duty can also be charged per unit of measure. In addition to duty, imports are subject to sales tax (VAT), excise on some products, and import regulatory duty.

Duty Rates

Duty rates in Pakistan vary from 0% to 100%, with an average duty rate of 20.67%. Some goods can be imported free of duty (e.g. laptops and other electronic products).

Federal Excise Duty (FED)

The Federal Excise Act, 2005, was promulgated with effect from 1st July, 2005. The Federal Excise duty is payable on:

a. Goods produced or manufactured in Pakistan; b. Goods imported into Pakistan; c. Such goods as the Federal Government may, by notification in the official Gazette, specify, as produced or manufactured in the non-tariff areas and brought to the tariff areas for sale or consumption therein; and d. Services provided or rendered in Pakistan.

86 How to Export - Pakistan

Special Excise Duty

As part of the budgetary measures for the year 2007-08, a Special FED at 1% has been levied on goods, which are manufactured or are imported by Pakistan. This duty is in addition to the FED as prescribed in First Schedule of the Federal Excise Act, 2005.

Sales Tax

Imports into Pakistan are not subject to sales tax by default. Only certain products, like cosmetics or food supplements, are subject to GST when imported into Pakistan. When applicable, the standard GST rate is 17% and the reduced rate is 5%, calculated on the sum of the CIF value, duty, import regulatory duty, and excise.

Minimum Thresholds

There is no minimum threshold for imports in Pakistan, i.e. import duty and taxes are always applicable on imports regardless of their value.

Other Taxes and Custom Fees

Excise duty is applicable on some goods such as alcohol, tobacco and other products. It can be applied ad valorem, calculated on the sum of the CIF value and applicable duty, or it can be specific, i.e. charged per unit of measure.

Import regulatory duty is charged on some products at a rate between 5% and 50% calculated on the CIF value.

Detailed information about duties levied on various goods and the current rules can be acquired from the Pakistan Customs Tariff and Customs Act 1969.59

6.2.5 General System of Tariff Preferences in Pakistan

The Generalized System of Preferences, or GSP, is a preferential tariff system, which provides for a formal system of exemptions from the more general rules of the World Trade Organization (WTO) (formerly, the General Agreement on Tariffs and Trade or GATT).

The European Union (EU) and Pakistan have set up a Sub-Group on Trade to promote the development of the two-way trade. The Sub-Group on Trade was set up under the auspices of the EU-Pakistan Joint Commission, which is the forum for discussions on Trade Policy developments more broadly and also aims to tackle individual market access issues, which hamper trade between the two parties.

59 http://download1.fbr.gov.pk/Docs/2015911119353372DraftCustomsActUpdated30.06.2015.pdf

87 How to Export - Pakistan

The European Union (EU) granted Generalized System of Preferences (GSP) Plus status to Pakistan from January 1, 2014, allowing almost 20 percent of the Pakistani exports to enter the EU market at zero tariff and 70 per cent at a preferential rate.

However, currently there is no significant preferential trade agreement that could support the trade between Pakistan and Brazil.

Latin-American Integration Association (ALADI)

The Latin-American Integration Association (ALADI) is an inter-Governmental organization that continues the process started by the Latin-American Free Trade Association (ALALC) in 1960 and promotes the integration in Latin America, in order to guarantee its economic and social development. Its final goal is the establishment of a Latin-American common market. ALADI member countries are Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela, gathering together 20.4 million square kilometers and more than 455 million people.

Pakistan is not associated with ALADI, hence ALADI has no direct bearing on any trade between Brazil and Pakistan.

MERCOSUR

MERCOSUR is preferential Trade Agreement between Brazil, Argentina, Paraguay, Uruguay and Venezuela. Although Brazil and Pakistan has trade agreement, signed in 1982, Pakistan has no connection with the Mercosur agreement itself.

6.3 Trade Agreements

Pakistan has the following regional / bilateral trade agreements:

 Trade & Investment Framework Agreement (TIFA) between Pakistan and USA  South Asian Association for Regional Cooperation (SAARC) - South Asian Free Trade Area (SAFTA)  Pak-Afghanistan Transit Trade Agreement (ATTA)  Pak-Malaysia Trade Agreements  Pak-China Trade Agreements  Pak-Sri Lanka Free Trade Agreement  Pak-Iran Preferential Trade Agreement  Pak-Mauritius Preferential Trade Agreement  Pak-Indonesia Preferential Trade Agreement

88 How to Export - Pakistan

6.4 Regulation of Foreign Trade Activities

6.4.1 General Policy on Imports

The Economic Regulations Program (ERP) was established in Pakistan after 2000. Import quotas, import surcharges and regulatory duties were removed while the maximum tariff rate was reduced from 80 percent to 25 percent. In 2005, Pakistan removed tariffs on cement, sugar, livestock and some vegetables. Currently, there are no licensing requirements or public sector monopolies in imports.

The Import Policy Order, 2013 governs imports into Pakistan. Salient features of the Import Policy are given below.

6.4.2 Basis of Imports

1. Imports may be made against all modes of payment subject to procedures prescribed by the State Bank of Pakistan. 2. Private sector importers may enter into Commodity Exchange Arrangements with suppliers abroad subject to the procedure notified by the State Bank of Pakistan. 3. For imports under loans, credits or bilateral assistance requiring contracts to be approved by the Economic Affairs Division or some other agency of the Government of Pakistan, Letters of Credit shall have to be opened within sixty days of registration of the contract with a bank designated by the State Bank of Pakistan. 4. Public sector agencies shall open Letters of Credit through a bank designated by the State Bank of Pakistan.

6.4.3 Import of Goods

Import of all goods is allowed from worldwide sources unless banned, prohibited or restricted by the Government. The amendments brought in by authority shall not be applicable to such imports where the Bill of Lading (B/L) or Letters of Credit (L/C) were issued or established prior to the issuance of the amending Order.

6.4.4 Prohibitions and Restrictions

Prohibitions

i. Goods specified in Appendix ‘A’60 of Trade Policy 2012-15 of Pakistan are banned for import. This ban however shall not be applicable on: a. Import of goods by the Federal Government for defence purposes;

60 Trade Policy 2012-2015, page number: 12 (www.commerce.gov.pk/Downloads/IPO_193_2012-15.pdf)

89 How to Export - Pakistan

b. Any goods which are exempt from customs duties on importation by the Foreign Diplomatic Missions in Pakistan under the Diplomatic and Consular Privileges Act, 1972; and c. Ministries, Divisions, Provincial Governments and their departments and other Government agencies may import items, irrespective of their import status to meet their requirements. ii. Goods of Israeli origin or imported from Israel. iii. Live animals i.e. cattle, buffalo, sheep and goats, meat and bone meal, tallow containing protein and feed ingredients of animal origin from BSE- infected countries, such as U.K, Ireland, Belgium, Denmark, Falkland, France, Germany, Italy, Luxembourg, Holland, Spain, Brazil, Czech. Republic, Austria, Poland, Slovakia, Slovenia, USA and Alberta Region of Canada; however import of meat and meat products from other parts of Canada shall be allowed subject to certifying additional animal quarantine requirements. iv. Poultry and poultry products and other captive live birds (pet, game, wild, exotic and fancy birds) from the listed countries (particularly where H5N1 is prevalent). This ban shall also not apply to the import of fancy, captive and game or hobby birds from South Africa subject to certification from their competent veterinary authority that these birds have originated from avian influenza-free zones or areas. This ban shall not apply to the import of processed or cooked poultry products from China, subject to the certification that poultry commodities or products have been processed at not less than 70 C (Degree Celsius) for a reasonable time length throughout the manufacturing or cooking to ensure the destruction of Highly Pathogenic Avian Influenza (HPAI)(H5NI) virus. v. Counterfeit products. vi. Imports of all rough diamonds from Côte d'Ivoire. vii. Goods specified in Appendix-‘C’61 of Trade Policy 2012-15 of Pakistan are banned for import in second-hand or used condition except those specifically exempted therein.

Restrictions

i. The goods specified in Appendix-‘B’62 of Trade Policy 2012-15 of Pakistan shall be importable subject to the conditions laid down. ii. The import of goods shall be subject to the same national quality standards or regulations as are prescribed for similar and domestically produced goods.

61Trade Policy 2012-2015, page number: 50 (www.commerce.gov.pk/Downloads/IPO_193_2012-15.pdf) 62Trade Policy 2012-2015, page number: 19 (www.commerce.gov.pk/Downloads/IPO_193_2012-15.pdf)

90 How to Export - Pakistan

iii. The import of goods from India or of Indian origin specified in Appendix- ‘G’63 of Trade Policy 2012-15 of Pakistan shall not be allowed. iv. In case of goods imported by Pakistan from Kenya, a fee of fifty US dollars per document or 0.5% of the invoice value of goods, whichever is higher, shall be charged by the Pakistani High Commission in Nairobi, Kenya for attestation of the Certificate of the Origin and the invoice related to such goods. v. The imports under the Border Trade Agreements and Pakistan- Afghanistan Trade Agreement shall be made in accordance with procedure notified by the Federal Government from time to time.

6.4.5 Dispute about Import Status

Any dispute or clarification regarding import status of any item, which cannot be resolved by the Customs Authorities shall be referred to the Ministry of Commerce for a final decision.

In case of any dispute or clarification regarding import status of any item due to the transposition of H.S 2007 version to H.S 2012 version, reference shall be made to the Ministry of Commerce for the necessary corrections.

6.4.6 Relaxation of Prohibitions and Restrictions

The Federal Government can allow the import of any prohibited commodity or goods by relaxation of any prohibition or restriction. However,z for that to happen, the importer will need strong reasons in alignment with another law.

The Federal Government may relax the requirement of re-export on goods imported on temporary basis on the conditions that it may deem appropriate.

The Federal Government may issue import authorizations in respect of any item for which relaxation is provided under law.

6.4.7 Imports Incentives

Compared to other South Asian countries, Pakistan promises a better return on investments due to its liberal investments policy, cheap labor and tax incentives. The Federal Board of Revenue (FBR) does not question the source of investments and only inquires that the investor pays the requisite income tax on that specific investment. Additionally, there is no requirement for a No Objection Certificate (NOC) from the provincial Governments. According to the Investment Policy 2013, the Board of Investment (BOI) approval is not required for foreign companies to open a bank account. Foreigners have free access to Pakistani capital markets and there are no restrictions on the repatriation of the principal amount of investments, dividends and profits.

63Trade Policy 2012-2015, page number: 64 (www.commerce.gov.pk/Downloads/IPO_193_2012-15.pdf)

91 How to Export - Pakistan

Based on its strategic location and its future prospects due to the China Pakistan Economic Corridor (CPEC), Pakistan can become a marketplace teeming with opportunities.

6.5 Trade Strategy

Pakistan has made substantial progress over the past decade in constructing a more open and transparent Trade Policy regime.

The Government has reduced tariff rates across the board. The simple average ad valorem tariff rate in the 2005/06 Trade Policy was just under 15 percent, compared to over 50 percent in 1995. Quantitative restrictions, exchange controls, and other direct state interventions in trade have been largely eliminated; ordinary customs duties are now the primary Trade Policy instrument. Many special regulatory orders that provided discretionary exemptions to firms or industries have been eliminated, thus levelling the playing field and making the trade regime less complex. The complete tariff schedule and regulatory orders affecting trade are easily accessible from given below Government websites:

 www.fbr.gov.pk/Docs/20157101374641856Reupdated5thScheduleandCUSTOM Tariff.pdf  www.commerce.gov.pk

6.5.1 Administrative Import Rules

Licensing

Firms wanting to delay direct entry into the Pakistani market should consider licensing arrangements with Pakistani firms, an option that permits them to enter the market in stages, if the initial response is promising.

Contingency of quotas

Pakistan does not have any quota system for the import of goods. Neither is there a requirement for getting any import license to import common items, goods and material.

Antidumping Measures

The National Tariff Commission Act, 2015 was promulgated in order to remove the issues of quorum and composition of the NTC, in light of the past practice and in line with the judgment of the Superior Courts of Pakistan. The anti-dumping duty at rates shall be levied on C&F value in ad valorem terms.

92 How to Export - Pakistan

Figure 26: Flow Chart of Anti-Dumping Investigation

Submission of a written application onto the Commission by or on behalf of domestic industry

Notice to the Government of exporting country Not to be publicized

Examination of accuracy and adequacy of information provided in the application

Decision whether to initiate and investigation (within 45 days)

Decision not to initiate- Initiation of Investigation - Applicable to be informed Notice in the press and of the reason for non- official gazette. (All known initiation interested parties informed)

Interested parties requested to make themselves known to the Commission (usually within 15 days of publication of notice of initiation)

Comments/views from interested parties (within 45 days of publication of notice of initiation)

Information gathering from exporters, foreign producers and importers through questionnaire (within 37 days of issuance of the questionnaire)

93 How to Export - Pakistan

Analysis of the information and verification during the spot investigation

Preliminary Determination (not earlier than 60 days and not later than 180 days after initiation of investigation)

Negative determination - Affirmative determination Termination of possible imposition of investigation provisional anti-dumping duty

Price Undertaking – may be If price undertaking not offered by exporter or offered or accepted - further sought by the Commission analysis

Disclosure meeting (if requested) within 15 days of preliminary determination

Hearing (if requested) within 30 days of preliminary determination

Issuance of Statement of essential facts (30 days before final determination)

Issuance of Statement of essential facts (30 days before final determination)

Negative Final Affirmative Final Determination – no duty Determination duty imposed imposed for a period not exceeding five years

94 How to Export - Pakistan

An antidumping duty may be imposed if it is established by the investigating authority (National Tariff Commission), after due process, that:

i. a product has been dumped into Pakistan; and ii. that dumping has caused or threatened to cause injury to Pakistan’s domestic industry.

If the export price is lower than the normal value, it constitutes dumping. Thus, there are two fundamental parameters used for determination of dumping, namely, the normal value and the export price. Both these elements have to be compared at the same level of trade, generally at ex-factory level, for assessment of dumping.

In case anti-dumping duty is warranted after the investigation, the Commission can impose duties up to the margin of dumping determined i.e. the difference between the normal value and the export price. The remedy against dumping is not always in the form of anti-dumping duty. The Authority may terminate or suspend investigation after the preliminary findings if the exporter concerned furnished an undertaking to revise its price to remove dumping or the injurious effect of dumping as the case may be. No anti-dumping duty is imposed on such exporters from whom price undertaking has been accepted.

An anti-dumping application is processed within a period of 12 months. Provisional anti-dumping duty can be imposed after 60 days of initiation of the investigation. Anti-dumping duty may be imposed for a period which may extend up to 5 years.

6.5.2 Imports via Postal Means

The Pakistan Post Office is a state enterprise dedicated to providing a wide range of postal products and public services. It is the premier national postal communications service holding together a vast country with a large population.

The Pakistan Post has implemented an express mail track and trace service, and inquiry reporting system. The Pakistan Post Office provides an extensive range of services to cater for both the personal and business needs of various segments. These traditional services constitute the core business of the Pakistan Post. The Pakistan Post Office consists of a network of 13,419 post offices, 76 General Post Offices (GPOs), 48 District Mail Offices (DMOs) and 3 Offices of Exchange, along with central management facilities in Islamabad and Lahore.

In addition, international courier service providers operate in Pakistan including FedEx, DHL and TNT.

Among the leading local courier service providers are:

a. TCS is a popular courier company in Pakistan and provides domestic and international express services to consumers, corporations, SMEs and

95 How to Export - Pakistan

households alike with pickups and deliveries crossing over 125 million shipments annually. They have 157 nationwide network offices and operate with around 8,000 professionals, including self-employed Sales Solicitors. TCS operates over 220 plus countries serving customers in 3,500+ destinations worldwide. b. Leopards Courier Services is the second largest courier company in Pakistan, established in 1983. The fast growing Leopards have now expanded to over 1,036 destinations for general clients (express centres). Currently, there are over 3,000 couriers and 1,000 express centre employees throughout the country. c. The Pakistan International Airline (PIA) established Air Express in 2003 and launched a full-fledged courier service. Initially serving Karachi, Lahore, and Islamabad, PIA Speedex offers premium courier services in 70 cities across Pakistan, and shipments are collected from and delivered to the doorsteps of customers. d. Overseas Courier Service (OCS) has been providing premium quality express courier, freight forwarding, and transportation and logistics solutions worldwide. Now, it stands among the leading companies in domestic and international delivery systems. They deliver products to customers in about 240 countries and 70 million international business packages each year to a variety of corporations around the globe.

6.5.3 Legal Considerations

The main Government agencies involved in the regulation of companies in Pakistan are:

 The Securities and Exchange Commission of Pakistan (SECP), which was set up following the 1997 Securities and Exchange Commission of Pakistan Act and has responsibility for the incorporation and registration of companies.  The Board of Investment (BoI) promotes investment opportunities in all sectors of the economy, and provides investment facilitation services to local and foreign investors.

It is advised to seek legal and taxation advice before entering into a joint venture or a similar type of partnership with a local company in Pakistan.

Standards and Technical Regulations

The Pakistan Standards and the Quality Control Authority (PSQCA) have the responsibility for maintaining standards and quality requirements in the country.

The Ministry of Health is concerned with labelling requirements of drugs, cigarettes etc. as well as with the procedures for ensuring that the import is not injurious to the health of the population. The Ministry of National Food Security and Research is responsible for the labelling on food items.

96 How to Export - Pakistan

In general, labelling in English and Urdu is required on all consumer products and needs to be approved by the relevant ministry or department. At the minimum, labels need to provide the following:

 Brand name  Ingredients list  Manufacturer details (address)  Importer’s name and address  Date of manufacturing  Date of expiry  Batch number  Contents marked in grams (gm) and millilitres (ml)  Any particular direction to avoid any associated risk

At provincial level, the Provincial Food Authority (PFA) is the responsible for enforcement of food hygiene and quality standards as described in the relevant provincial Food Authority Acts. The Authority is responsible for formulating standards, procedures, processes and guidelines for food business, food labelling, food additives, and specifying appropriate enforcement systems for food safety and quality standards.

6.5.4 Packaging and Labelling

In Pakistan, there are rules and regulations for chemical management, safety, specific chemical categories (pesticides, explosives and other hazardous substances), and chemical environmental impact assessments. Pakistan does not have a universal system for labelling or marking requirements on products; however, there are a few industry specific regulations. Based on provisions in the Environmental Act 1997, the Pakistan chemical regulations for packaging and labelling fall under the draft legislation Hazardous Substances Rules, 2003 (rule 9, sub-rule 1 & 2).

Packaging requirements include:

 An original packing list signed in blue ink and stamped with a company seal  Exact contents of each package should be clearly identified  At least 3 copies of the packing list as part of the shipping documents sent to the consignee or agent  Net weight and gross weight must match weights on commercial invoice and bill of lading  Packing list for all shipments is required to contain more than one shipping unit of packaged cargo.

6.6 Exchange Rate Regime

Since July 2000, Pakistan is following de jure a flexible exchange rate regime. Nevertheless, the de facto exchange rate arrangement has managed to float without

97 How to Export - Pakistan

fixing pre-determined paths for the exchange rate. The Central Bank's interventions are limited to moderating and preventing excessive fluctuations in the exchange rate. The Central Bank intervenes in the market using the US dollar. Foreign exchange controls and restrictions are now minimal. Current account transactions are now unrestricted except for occasionally imposed limits on advance payments for some imports. Foreign investors can now freely bring in and take out their capital, profits, dividends, royalties, etc. The IMF (2010) classifies Pakistan's exchange rate regime as a de facto conventional peg to the US dollar within a narrow band.

The State Bank of Pakistan controls and governs currency transfer in Pakistan, both inward and outward. The limit for in-cash transfer is USD 10,000 while the banking system provides unlimited currency transfer facility, conditional to the documentation requirements.

For payment of imports, it is mostly done through a documentary letter of credit (LC), however there are some other methods as well for international trade financing. The parties can choose their preferred method. The acceptable methods of payment are:

 Letter of credit  Advance payment  Open Account  Contract (where payment may be made without involving a guarantor bank)

All import transactions are governed by the State Bank of Pakistan’s rules and regulations.

Documentation and Requirements

Only the following initial documents are required to import into Pakistan:

i. National Tax Number Certificate, which is issued by the Income Tax Department on filing of an application form accompanied with an attested photocopy of the National Identity Card. ii. A current bank account is required for import proceedings and documents iii. Sales Tax Registration. iv. Membership certificate of a Chamber of Commerce and Industries or any relevant trade association of Pakistan.

6.7 Practical Recommendation for Exporters: Procedures in Pakistan

6.7.1 Customs Clearance

In Pakistan, the Customs Clearance at the time of the import can be divided into two major segments. The first appraisal, where the goods are physically verified and the customs duty is calculated, and the second appraisal where the actual or final duty is

98 How to Export - Pakistan

calculated and levied upon the importer. Shipments may be received at either a sea, airport or dry port declared by the customs authorities as customs ports, customs airport and land customs station; the procedure for clearance is the same for every customs station.

6.7.2 Legal Requirements

The Customs Clearance process starts with the arrival of the cargo ship, plane or other carrier of goods on the designated sea, land and airports. Upon arrival of the goods at the customs port, the port authorities issue the Import General Manifest (IGM) to each shipment. It is a number indicating the serial of the shipment arrived during the year. Upon receipt of the IGM the consignment is further indexed to allow for a systematic reference of all goods received. After issuing this number, the shipment is offloaded and sent back to the port warehouse. In the case of land customs station (i.e. dry port etc) the IGM is issued not at the time the goods reach the land customs station, but at the time the goods are offloaded at the sea or airport. Upon arrival of the offloaded goods, the clearance process starts. Normally at this point, a clearing agency is engaged by the importer to facilitate the process of Customs Clearance and to reduce the interface with the customs officials.

6.7.3 Clearance Procedure for Imports

The following documents must be provided to the clearing agent for processing:

 Invoice of shipment  Packing list  Bill of lading  Copy of the Letter of Credit or Contract  Copy of the Sales Tax Registration Certificate as an importer  Copy of the National Tax Number  Copy of the most recent sales tax return

Note: There is no import/export license required

6.7.4 Documentation at the Destination

Table 74: Documentation Required at the Destination of Imports Process phases Documents/information Required Purchase order Order Acknowledgment First phase Performa invoice (ordering) Letter of credit Shipment Advice & Plan Second phase Commercial invoices (Documentation) Packing list Bill of Lading/Airway bill Weight Note

99 How to Export - Pakistan

Table 74: Documentation Required at the Destination of Imports Process phases Documents/information Required Health certificate Second phase Halal Certificate (Documentation) Certificate of analysis Sanitary certificate Insurance cover note or Marine insurance Bill of entry (Goods Declaration) Third Phase Duty receipt (Clearance) Excise duty Receipt Transportation if any Submission of documents Fourth phase Remittance telex (Remittance) Payment done

Note: The Bill of Lading/Airway Bill is the most important document, without this the consignment cannot be released by the bank.

6.7.5 Dry / Inland Ports in Pakistan

At present, there are six dry ports under the management of Pakistan Railways:

 Lahore Dry Port, established in 1973  Karachi Dry Port, established in 1974  Quetta Dry Port, established in 1984  Peshawar Dry Port, established in 1986  Multan Dry Port, established in 1988  Rawalpindi Dry Port, established in 1990

In addition to the above, the following Dry Ports were established and run under the management of private sector firms:

 Sialkot Dry Port, established in 1986  Faisalabad Dry Port, established in 1994  Sost Dry Port,  NLC Dry Port at ThokarNiaz Beg Lahore  NLC Dry Port at Quetta  QICT Dry Port at Prem Nagar Railway Station, established in 2010  Sialkot International Container Terminal

The Port Qasim

The Port Qasim is a deep-water seaport in Karachi, Sindh on the coastline of the Arabian Sea. It is Pakistan's second busiest port, handling about 35% of the nation's cargo (17 million tonnes per annum). Port Qasim and the Karachi Port, the busiest port of the country, together handle more than 90% of all external trade of Pakistan.

100 How to Export - Pakistan

Figure 27: Port Qasim, Karachi, Pakistan

The port encompasses a total area of 12,000 acres (49 km2) wherein many industrial zones operate. In addition to the Pakistan Steel Mills (PSM) and KESC, Bin Qasim Power Plant, around 80% of the Pakistan's automotive industry is located at Port Qasim. The port also provides direct waterfront access to two major nearby industrial areas, Export Processing Zone (Landhi) and Korangi Industrial Area.

Tax Exemptions for Gwadar Port Operators

Pakistan has approved tax concessions for Chinese operators at the deep-sea Gwadar port and the for businesses that will operate in the Gwadar Free Zone for up to 40 years. The Arabian Sea port will become an important node in the Beijing’s ‘One-Belt, One-Road’ strategic initiative.

The most important concession is 23 years’ income tax holiday to businesses that will be established in the Gwadar Free Zone. A Statutory Regulatory Order to that effect will be issued and the changes will come into force the day the order is issued.

6.8 Special Customs Regimes in Pakistan

All shipments crossing international borders must be cleared through Customs in the destination country prior to being delivered to the recipient. The shipments are submitted to Customs and other regulatory agencies. It is the sender's responsibility to provide the necessary and correct documentation. If shipments are held by the Customs because of incorrect or missing documentation, the first attempt is to notify the recipient. When shipping to Pakistan, clearance through the Customs depends on whether the shipping has:

101 How to Export - Pakistan

 Documents with no commercial value  Dutiable goods

Packages must include an original invoice and packing list or clearance will be delayed.

Imported telecommunication equipment requires a Non-Objection Certificate (NOC) from the Pakistan Telecommunication Authority (PTA).

Shipments will be detained for a maximum of 30 days from the date of arrival. If proper documentation has not been received by this time, the shipment will either be destroyed or confiscated, and subject to fines and penalties. Duty and taxes will be applied to all shipments at approximately 53% of the assessed value of the shipment.

Proper documentation must be provided by the consignee for all shipments weighing over 5 kg (11 lb) and valued at USD 100 or more for clearance.

The Consignee must have a Sales Tax Certificate, Import Registration, Monthly Sales Tax Return (regardless if sales tax is applied to shipment) and a NTN Number for all commercial shipments for clearance.

Without prior Customs Clearance and payment of applicable duties and taxes, return to origin will not be allowed.

6.9 Special Customs Regimes in Brazil

Special Customs Regimes offer a different customs control treatment for both imports and exports in Brazil.

The Brazilian Government has decided to unify the current manifest reporting system, “Merchante” (for imports) and “Siscomex” (for exports) into a new and unique system called “SISCOMEX CARGA”.

The system will serve to control and audit Brazilian cargoes loaded, trans-shipped or discharged on any vessel.

“SISCARGA” is the new automated system for Brazilian Customs and its implementation has the objective of controlling the entrance and exit of vessels on bonded ports, foreign cargo for imports, exports or in transit and empty containers transported by sea, since its manifest up to its delivery to the importer or exit of bonded territory, as well as plan customs inspection prior to cargo arrival, through risk analysis over informed data. The following is a summary of the main requirements of SISCARGA:  Exports from Brazil (Shipping Instruction cut-off is 72 working hours before the vessel’s arrival at the port of loading):

102 How to Export - Pakistan

 Full shippers' name and address, related to the company filled in the Shipper’s Bill of Lading section;  Shipper's CNPJ or CPF (Federal Revenue - Tax payers Register Number for companies or individuals, respectively), as per the section "Shipper" in the bill of lading, under status "active" in the Customs House Bureau;  Merchandise to be measured in cubic meters (m³) and specified in packaging (if pallets, cases, big bags, etc.);  Merchandise gross weight in kilograms (container tare to be excluded);  Cargo NCM (International Harmonized Tariff Code), 4 (four) first digits (position) or optionally 8 (eight) digits (complete sub-item code), for each merchandise item stuffed into the container.  It is imperative that the information inserted in the "DRAFT" is accurate, since SISCARGA does not permit any data alteration after it is registered in the system. Should any correction after data transmission be necessary, the same will be subject to penalties per bill of lading. Note: As regards the export cargo manifests, they must be filed with Customs up to 8 hours (without fail) before the vessel's arrival in each calling port.  For the import cargoes, transfer, trans-shipment or containers in transit, coming from overseas, it is mandatory that all Bills of Lading issued by the respective agents from the origin contain the following information:  Full consignee and notify name/address, as per corresponding fields in bills of lading sections;  Consignee and notify CNPJ or CPF (Federal Revenue Register Number for companies or individuals, respectively), as per the respective Bill of Lading fields, under status "active" in the Customs House Bureau registers. Whenever the consignee is a foreigner, the identification will be made by means of complete full style;  To order, a Bill of Lading is acceptable, though the shipper has to inform the actual shipper within the timeframe mentioned above.  Merchandise to be measured in cubic meters (m³) and specified in the packaging (crates, pallets, cases, big bags, etc.);

6.10 Principal Regimes Applied in Brazil

Several taxes and fees are applicable on imports into Brazil; these are usually paid during the Customs Clearance process. There are three taxes that account for the bulk of import costs: the Import Duty (II), the Industrialized Product tax (IPI) and the Merchandise and Service Circulation tax (ICMS). Additionally several smaller taxes and fees also apply to imports. The majority of the taxes are calculated on a cumulative basis.

Brazil and its Southern Common Market (Mercosul) partners, Argentina, Paraguay, and Uruguay implemented the Mercosul Common External Tariff (CET) since January 1, 1995. Venezuela became a full member of Mercosul in 2012. Each country maintains a separate exceptions list of items for tariffs.

103 How to Export - Pakistan

In 1995, Brazil implemented the Mercosul Common Nomenclature, known as the NCM (NomenclaturaComum do Mercosul), consistent with the Harmonized System (HS) for tariff classification.

Brazil established a computerized information system to monitor imports and to facilitate Customs Clearance known as the Foreign Trade Integrated System (SISCOMEX). Brazilian importers should be registered in the Foreign Trade Secretariat’s (SECEX’s) Export and Import Registry and receive a password given by the Customs to operate the SISCOMEX. The SISCOMEX online registry creates electronic import documents and transmits information to a central computer.

Import duty is a federally-mandated product-specific tax levied on a CIF (Cost, Insurance, and Freight) basis. In most cases, Brazilian import duty rates range from 10 percent to 35 percent. A complete list of NCM products and their tariff rates is available in www.export.gov/apex/article2?id=Brazil-Import-Tariffs

6.10.1 Ex-Tarifário

Brazil’s customs regime does allow for ex tariff imports (ex tarifário) of foreign goods under some circumstances. When there is no similar equipment being manufactured locally in Brazil, an importer can seek import duty waivers to reduce import costs. This tax reduction is called ‘ex tariff’ or ‘ex tarifário’. The ex-tariff regulation consists of a temporary reduction on import duties of capital goods, information technology and telecommunications (BIT), when there is no domestic equivalent production. Generally, if this status is granted, the import tariff can be temporarily lowered to 2 percent for up to two years. To qualify, foreign exporters or their legal representatives must submit a technical application to the Ministry of Trade for review.

6.10.2 Industrialized Product Tax (IPI)

The IPI is a federal tax levied on most domestic and imported manufactured products. It is assessed at the point of sale by the manufacturer or processor in the case of domestically produced goods, and at the point of Customs Clearance in the case of imports. As part of the federal Government’s efforts to support local producers, IPI rates between imported and domestically produced goods within the same product category may differ. Specifically, when the product is sold to the end user, the importer debits the IPI cost.

The Government of Brazil levies the IPI rate by determining how essential the product may be for the Brazilian end-user. Generally, the IPI tax rate ranges from 0 percent to 15 percent. In the case of imports, the tax is charged on the product's CIF value plus import duty. A product’s IPI rate is directly proportional to its import tariff rate. As with value-added taxes, IPI taxes on products that pass through several stages of processing are reduced to compensate for IPI taxes paid at each

104 How to Export - Pakistan

stage. Brazilian exports are exempt from the IPI tax. The complete list of NCM products and their IPI tariffs is available in: http://www.planalto.gov.br/ccivil_03/_ato2015-2018/2016/decreto/Anexo/AND8950.pdf

6.10.3 Merchandise and Services Circulation Tax (ICMS)

The ICMS is a state Government value-added tax applicable to both domestic products and imports. The ICMS tax on imports is assessed ad valorem on the CIF value, plus import duty, plus IPI. Although importers have to pay the ICMS to clear the imported product through Customs, it is not necessarily a cost item for the importer because it is included in the final price of the product and is paid by the end user. The importer debits the ICMS, when the product is sold to the end user.

In practice, the tax is paid only on the value-added. The ICMS tax due to the state Government is based upon taxes collected on sales by a company, minus the taxes paid in purchasing raw materials and intermediate goods. The ICMS tax is levied on both intrastate and interstate transactions and is assessed on every transfer or movement of merchandise. The rate varies among states: in the State of São Paulo, the rate varies from seven percent to 18 percent. On interstate movements, the tax will be assessed at the rate applicable to the destination state. Some sectors of the economy, such as mining, electricity, liquid fuels and natural gas can be exempt from the ICMS tax. Most Brazilian exports are exempted.

6.10.4 RECOF

RECOF consists of a Special Customs Regime of Industrial Warehouse under automated control of the Customs Board, which allows the beneficiary company to import or to acquire in the local market raw materials, parts and components destined to industrial application, on which taxes are suspended. Part of these goods must be applied on industrial processes, and they can be subsequently shipped both to domestic and foreign markets. When exporting the finished good, the company terminates the payment of taxes.

Among other benefits granted by the regime are the following:

 Import or purchase in the local market, raw materials, parts and components on which taxes are suspended.  Tax exemption on exports.  Cash flow gains when the product is sold in the domestic market. Taxes are suspended until the 10th day of the month after that of the sale.  Reduction in storage fees charged by INFRAERO (Brazil's Civil Aviation Authority).  Suspension of the AFRMM (Contribution for Renovation of the Merchant Fleet).

105 How to Export - Pakistan

Requirements to Qualify For the Regime:

 An automated system approved by the Brazilian Federal Revenue Service for controlling all the flow.  Tax compliance.  Equity equal to or higher than Brazilian Real (R$)6410 million.  Companies can apply if engaged in: i. Assembling products; ii. Transforming, processing and assembling parts and pieces; and iii. Packing and repacking products.

Commitments Made by the Beneficiary to Remain Under the Regime:

 Export manufactured goods with the minimum annual value of 50% of total merchandise imported under the regime, in the minimum amount of USD 5 million.  Annually apply at least 80% of foreign merchandise purchased under the regime to manufacture goods (this percentage is reduced to 75% if the company exports more than USD 50 million and to 70% if the company exports more than USD 100 million).

6.10.5 RECOF SPED

RECOF-SPED (Special Customs Regime of Industrial Warehouse under control of the Public System of Digital Bookkeeping) is a special regime that simplifies and expands the possibilities already offered by the RECOF, allowing the beneficiary to import or to acquire in the local market raw materials, parts and components, on which taxes are suspended. Part of these goods must be applied on industrial processes, and it subsequently can be shipped both to domestic and foreign markets. When exporting the finished good, the company exempts the payment of taxes.

Among other benefits granted by the regime, there are:

 Import or purchase in the local market, raw materials, parts and components on which taxes are suspended.  Tax exemption on exports.  Cash flow gains when the product is sold in the domestic market. Taxes are suspended until the 15th day of the month after that of the sale.  Reduction in storage fees charged by INFRAERO (Brazil's Civil Aviation Authority).  Suspension of the AFRMM (Contribution for Renovation of the Merchant Fleet).

64Brazilian Currency, Real

106 How to Export - Pakistan

Requirements to qualify for the regime:

 Fulfil the obligations to submit the Digital Tax Bookkeeping (EFD) files.  Tax compliance.  Companies can apply if engaged in: i. Assembling; ii. Transforming, processing; iii. Packing and repacking products.

Commitments made by the beneficiary to remain under the regime:

 Export manufactured goods with the minimum annual value of 80% of all total goods imported and acquired under the regime, in the minimum amount of USD 5 million (and the percentage is reduced to 50% in the first year of use).  Annually process at least 80% of foreign merchandise admitted under the regime, and the index is reduced to 70% for products manufactured for the local market.

6.10.6 REPETRO

REPETRO (Regulatory Instruction IN 1415) is a Special Customs Regime applicable to the export and import of goods used in the exploration and drilling for oil and gas reserves and was established in the 1990s. This Customs Regime allows the suspension of federal taxes and administrative fees such as the Contribution for Renovation of the Merchant Fleet charged on the import of goods.

The Brazilian Federal Revenue Service allows the use of regimes by companies that meet the following requirements:

i. The company must hold a concession or authorization by the Government to explore and drill for oil and gas fields within Brazil’s territory, pursuant to Law No. 9,478 of August 6, 1997; ii. The company provides services consisting of the activities that are the subject matter of the concession or authorization, as well as its subcontractors; iii. The company must be located in Brazil and formally appointed by the company authorized by the Brazilian Federal Revenue Service to import goods that are the subject matter of a freight, rental, operating lease or loan agreement, and needs to prove that the referred goods are linked to the performance of a service agreement between them.

REPETRO offers tax benefits for the imports of:

 Vessels (tankers, research vessels and support vessels);

107 How to Export - Pakistan

 Machinery, appliances, instruments, tools and equipment;  Exploration and drilling platforms  Automobiles assembled with machinery, appliances, instruments, tools and equipment;  Lines, pipelines and umbilical cables;  Structures specially designed to support oil platforms.

Among other benefits granted by the regime are the following:

 Imports on which II - Import Tax, IPI - Federal VAT, PIS - Contribution to the Social Integration Program, COFINS - Contribution for Social Security Funding and ICMS - State VAT are suspended or reduced).  Exemption from the payment of taxes when the goods received under the REPETRO regime are re-exported.

The Federal Revenue Service sets the following requirements to be met by a company to qualify to operate under the REPETRO:

 Automated system for the regime’s accounting control.  System for controlling the status and movement of inventory items subjected to REPETRO.  Exploration Concession Agreement issued by regulatory agencies (ANP - Brazilian Oil Agency).  Authorization from the Brazilian Navy.  Tax compliance.  Companies can apply if engaged in: i. assembling products; ii. transforming, processing and assembling parts and pieces; and iii. packing and repacking products in the production chain of the oil industry.

Commitments made by the beneficiary to remain under the regime:

 Use the goods within the deadline and solely for the purposes and in the conditions established under the regime.  Assume tax liabilities to the Federal Revenue Service.  Identify the goods used, produced and exported under REPETRO.  Conduct an audit to evaluate what has been achieved under the regime.

6.10.7 Virtual Warehouse – Inland Customs Warehouse

The Inland Special Customs Warehouse Regime (Regulatory Instruction IN 241) allows importing and exporting companies to deposit their goods in bonded warehouses under the control of tax authorities and enjoy the suspension of taxes.

108 How to Export - Pakistan

This Regime has two main types:

 EADI Exporter, which is subdivided into EADI Ordinary Exporter, aimed at companies from all economic segments that export goods, and also the EADI Extraordinary Exporter, aimed at trading companies.  The other type is EADI Importer, which comprises all sorts of companies that need input and make imports.

This is a Customs Regime that allows operations together with other regimes, such as Drawback, RECOF and DAC (Certified Bonded Warehouse).

The Special Customs Depot Regime for Imports allows the storage of foreign merchandise in a bonded warehouse publicly used, and federal taxes, PIS/PASEP - Import and COFINS - Import charged on imports are suspended. Merchandise qualified for the Customs Depot Regime for Imports and Exports may be:  Displayed, and shown to work and tested to check whether they work.  Processed.  Have their tags maintained or repaired to meet the requirements of foreign buyers.

Benefits granted under the Inland Customs Warehouse Regime are the following:

 The Inland Customs Warehouse Regime for imports allows the storage of merchandise at bonded warehouses, and applicable taxes are suspended.  The Inland Customs Warehouse Regime for exports allows the storage of merchandise at a bonded warehouse: i. under the common regime: with suspension of applicable taxes. ii. under the special regime: enjoying the right to use the tax benefits granted as export incentives, before their actual shipment abroad.

The requirements set for companies to qualify for the regime consist of:

 Registering the bonded warehouse within the Brazilian Federal Revenue Service.  Developing an automated control system over the inflow, movement, storage and outflow of merchandise held by the regime's beneficiaries.  Each beneficiary should create an isolated area inside the bonded warehouse to carry out the transactions allowed by the regime.  Posting official reports on the web for inspection by the Brazilian Federal Revenue Service.  The beneficiaries of the Inland Customs Warehouse Regime for exports must meet the following requirements: i. under the common regime: the legal entity that deposits merchandise to be shipped to foreign markets in an accredited warehouse. ii. under the special regime: only the exporter.

109 How to Export - Pakistan

Commitments made by the beneficiary to remain under the regime:

The merchandise can remain under the Inland Customs Warehouse Regime for exports for:

i. under the common regime: one year, which may be extended for not more than two years. ii. under the special regime: 180 days.

6.10.8 Virtual Depot - Certified Bonded Warehouse

The Certified Bonded Warehouse regime (DAC) allows the storage of merchandise at bonded warehouses. The special customs regime of the Certified Bonded Warehouse considers as exported, for all tax, credit and foreign exchange purposes, local produced goods deposited in a customs bonded area, sold to a person/company abroad, under a contract for delivery in the national territory and to the order of the purchaser.

The Certified Bonded Warehouse Regime (Regulatory Instruction IN 266) allows domestic merchandise to be deposited at a bonded warehouse and sold to a person or entity located abroad and be considered exported for all tax, credit and foreign exchange purposes under an agreement for delivery in Brazil by order of the acquirer. The Regime will be operated upon authorization from the Brazilian Federal Revenue Service at a bonded warehouse publicly or privately used. The Regime is terminated when the shipment invoice is issued or the good is transferred to another special regime.

Possibility of Transferring to Other Special Regimes (Drawback, Temporary Admission, RECOF, REPETRO, Customs Depot and Free Trade Shop)

For the exporter:

 Possess a positive accounting, due to tax revenues, which are paid in advance.  It is possible to optimize credit lines and foreign exchange contracts.  The exporter's responsibility ends when the merchandise becomes qualified for DAC.  More flexible financial flows due to capital turnover.  More competitive prices, because reducing inventory costs becomes possible.

For the importer:

 The importer may resell the imported goods to other companies not domiciled in Brazil.  More options from suppliers.

110 How to Export - Pakistan

 Reduction in logistics costs, with the formation of economic batches.

The merchandise may be kept under the regime while the Bonded Warehouse Certificate is valid for a period of 12 months, which may be extended in special cases to up to 24 months.

Companies must meet certain requirements to qualify for the regime:

 Have an automated system for controlling the regime by posting official reports on the web for inspection by the Brazilian Federal Revenue Service.  Merchandise must be sold to a person or entity located abroad, who appointed an agent accredited with the Brazilian Federal Revenue Service, under an agreement for delivery in Brazil for the purchaser, at a warehouse authorized to operate under the regime.  Merchandise is sold under a DUB contract.  The transaction must have an Export or Import register at the Integrated Foreign Trade System (SISCOMEX).  Issue of the Bonded Warehouse Certificate to transfer the property title of the merchandise.  The merchandise must be deposited by the seller for the purchaser at a place authorized by the Brazilian Federal Revenue Service.  The merchandise must be checked and cleared for export.

Commitments made by the beneficiary to remain under the regime:

 Federal Revenue Service Authorization for the company to be allowed into the Regime.  Specification of the types of cargo to be stored under the regime: general, refrigerated in meat-packing plants or in bulk.  Blueprint of the location and cut of the area for handling and storing merchandise.  Electronic issue of the Bill of Lading for bonded warehousing (CDA).

6.10.9 Special Temporary Admission Regime

In Brazil there is a Special Regime that grants total or partial exemption of taxes due to the import/entry of some goods in the country. This is known as The Regime Especial de Admissão Temporária, which is Portuguese for Special Temporary Admission Regime. The goods should be entering the country with a certain purpose and for a specific period of time. Total or partial exemption of payment of taxes due is granted to those importers who commit themselves to exporting the goods out of Brazil.

In case of noncompliance to the conditions, requirements or deadlines of the Special Temporary Admission Regime, a fine of 10% on the FOB value of the goods will apply.

111 How to Export - Pakistan

Qualification for the Special Regime

The special temporary admission regime will be granted to travellers living abroad and who are entering Brazil with goods with an overall value of more than USD 3,000. The goods admitted under the Special Temporary Admission Regime should be presented for customs inspection.

The traveller residing abroad is defined as a person who:

 Does not reside permanently in Brazil and is not classified as a resident of the country  Has withdrawn permanently from Brazilian territory and submitted the Comunicação de SaídaDefinitiva do País (Communication of Permanent Departure from the Country)  Has withdrawn permanently from Brazil or has been absent temporarily without submitting the Communication of Permanent Departure from the Country, after they have completed 184 days of permanence abroad, either consecutive or not, within a period of up to 12 months  Has entered Brazil on a temporary visa and has remained in the country for less than 183 days, either consecutive or not, within a period of up to 12 months  Has entered Brazil on a temporary visa and has remained in the country until before the day of obtention of a permanent visa or employment contract, if this occurs before completing 184 days of permanence in Brazil, either consecutive or not, within a period of up to 12 months  As a non-resident of the country, enters Brazil to offer services as an employee of a foreign Government entity located in Brazil, except if that person is a Brazilian national and has returned to the country with the intention of remaining permanently  The traveller should provide information at the customs concerning their return abroad and maintain this updated data in an office of Receita Federal (Federal Revenue). If requested by the Federal Revenue, the traveller should present the goods admitted under the special regime to a Federal Revenue office for purposes of termination of the special regime.

Items covered by this Special Regime

The following items are covered under this regime:

 Clothing, personal and adornments accessories  Beauty and hygiene products  Binoculars and cameras, accompanied by compatible quantities of batteries and accessories  Portable devices for recording or for reproduction of sound and image, accompanied by compatible quantities supporting devices, batteries and accessories

112 How to Export - Pakistan

 Portable musical instruments  Cellphones  Manual tools and objects, including portable computers for the exercise of professional activities or leisure of the traveller, provided they are compliant to customs legislation  Baby strollers for children and equipment for travellers with special needs  Portable hemodialysis devices and similar medical equipment and other similar equipment  Goods for humanitarian clinical and surgical activities  Vehicles of travellers residing outside of Mercosul  Goods intended to be utilized in the making of any object or in the maintenance of any project of space-related activities  Goods used in fairs, exhibitions, congresses and other scientific or technical events  Goods used in scientific research or expeditions, provided that they are related to projects authorized beforehand by the Conselho Nacional de Desenvolvimento Científico e Tecnológico  Items used in shows, exhibitions and other artistic or cultural events, sporting competitions and exhibitions, trade or industrial fairs and exhibitions, trade promotion, including not-for-sale samples and samples used by sales representatives  Goods for inward processing

6.10.10 Customs Clearance

The compulsory procedures for applying for the Special Temporary Admission Regime during the Customs Clearance process depends on the purpose of the goods and the beneficiary of the regime. The following specifications should be followed for the Customs Clearance of the goods admitted under this Special Regime:

 In the case of accompanied baggage brought by a non-residing traveller in Brazil, an Electronic Travellers’ Customs Declaration (Declaração Eletrônica de Bens de Viajantes or e-DBV) should be presented at the moment of the Customs Clearance.  In the case of goods brought by a foreign dignitary, a Declaration of Entry of Foreign Goods (Declaração de Entrada de Bens Estrangeiros) should be presented at the moment of the Customs Clearance.  In the case of entry of instruments or equipment accompanying promotional material in circulation in Mercosul member states that will be distributed at fairs, trade shows or any other touristic, cultural, educational, sporting, religious or commercial event of these countries, a Customs Declaration of Promotional Material (Declaração Aduaneira de Material Promocional) should be presented at the moment of Customs Clearance.  In the case of goods included in cultural events or projects imported by any State member of Mercosul, a Customs Declaration of Cultural Goods

113 How to Export - Pakistan

(Declaração Aduaneira de Bens de Caráter Cultural) must be presented at the moment of the Customs Clearance.

For all other type of goods a Simplified Import Declaration (Declaração Simplificada de Importação) should be presented at the moment of the Customs Clearance.

6.11 Drawback Regimes in Brazil

A drawback is a Customs regime which consists of the suspension, exemption or refund of the taxes on the products that were used in the production process of exported goods.

The regime is granted to operations that can be classified as:

 Transformation;  Manufacturing;  Beneficiation;  Renovation or reconditioning;  Packaging or repackaging

This applies to the entire good or to the parts that constitute it. It benefits businesses by allowing the Brazilian exports to become more competitive. The initiative also increases profit and encourages investments in the improvement and modernization of industrial hubs due to the tax exemption.

6.11.1 Suspension Drawback

In this modality, there is the suspension of taxes applied to imports, such as the Import Tax and IPI of the goods used in the industrialization of the exported product. This suspension is granted by the IRS (Receita Federal).

Compliance with the drawback regime could be achieved by using other inputs of the same kind, quality and quantity, imported or by purchase domestically without the benefit, in accordance with the limits and conditions established by the executive branch.

6.11.2 Exemption Drawback

The exemption modality involves the exemption of the Import Tax (II), IPI and AFRMM (Additional Freight for the Renewing of the Merchant Marine) for goods in equivalent quality or quantity, destined to the reposition of goods previously imported with the entire collection of taxes and used in the industrialization of the exported product. This exemption is granted by SECEX, the Brazilian Department of Foreign Trade.

114 How to Export - Pakistan

6.11.3 Refund Drawback

Drawback refund is the suspension of the incident taxes in the import operation (Import Tax –II -, Tax over Industrialized Products – IPI – and Additional Freight for the Renewing of the Merchant Marina – AFRMM) of the goods to be exported after being sent to manufacturing, complementation, reconditioning or conditioning of another good about to be exported. This refund is granted by DECEX (Commercial Trade Operations Department) through SECEX.

6.11.4 ”Verde-Amarelo” Drawback

Drawback “verde-amarelo” (or “green and yellow") grants the suspension of IPI, PIS (Programa de Integração Social/Social Integration Program) and COFINS (Contribuiçãopara o Financiamento da Seguridade Social) in the acquisition of raw material, intermediate products and packing material in the internal market. The modality covers imports and acquisitions made in the internal market for the incorporation of the good about to be exported.

This drawback modality contributes directly to the decrease of manufacturing processes and to the increase of Brazilian products in the foreign market.

6.11.5 Integrated Drawback

Integrated drawback is a special regime to stimulate exports by exemption of taxes related to imports (II, IPI, PIS, COFINS, ICMS and AFRMM) and acquisitions in the internal market. The regime also applies to goods that are used in the repair, production, cultivation or mining activity of products to be exported.

6.11.6 Special Deposit

The special Customs regime of Special Deposit allows the storage of parts, components and materials for replacement or maintenance, suspending payments of federal taxes, PIS/PASEP (Employees’ Profit Participation Program / Public Service Employee Savings) – Import and COFINS (Tax for Social Security Financing) – Import, for foreign vehicles, machinery, equipment, apparatus and instruments, whether nationalized or not, and locally produced ones in which foreign parts and components have been used as defined by the Ministry of Finance.

6.11.7 Temporary Exports

The special customs regimes of Temporary Exports allows certain goods to leave the country, with suspension of payment of export taxes, conditioned to their return within a determined period of time, in the same condition they were exported.

6.11.8 Re-export

Goods which are temporarily admitted into Brazil after following the specified procedure can stay in Brazil for up to a maximum 5 years. There are very strict rules

115 How to Export - Pakistan

regarding the entry of used merchandise into Brazil. An example of products falling under this program would be the temporary importation of machine tools. The example in the table below shows that taxes due are proportional to the period the imported product will remain in Brazil. This also applies to temporary entry of personal belongings.

Table 75: Permanent and Temporary Tax Examples - Brazil CIF price of machine tool USD 200,000 Import Tax-II of 10 percent on CIF USD 20,000 Tax over Industrialized Products-IPI of 5 percent X (CIF plus II) USD 11,000 Taxes that would be owed if importation were permanent USD 31,000 Total life span of machine tool 60 months Time machine tool with stay in Brazil 12 months Tax for temporary importation USD 6,200 Value =31,000 X (I-(60-12)/60) (20 percent of tax is owed as tool will stay in Brazil 1/5 of it’s useful life)

The documents prepared when importing the goods/equipment i.e. Import Invoice and Import Declaration form should be available at the time of re-exporting. The declared value of equipment on the re-export documents should be exactly the same of what was listed for that equipment in the import documents. Devaluing your equipment is not recommended, as it will require a significant amount of additional paperwork and approval. You must indicate the current, actual weight of the box that you plan to re-export from Brazil. At the time of re-export, because the equipment usually is only sent to the airport after the Central Office confirms that all the documentation is complete, the average storage time for exports is 3-5 days.

6.11.9 Free Trade Zones and Duty Free Shops

In Brazil, the first EPZ (Export Processing Zone) still in operation is located at the Port of Pecém in Ceará. A steel company will be the first to operate in the port´s free trade zone.

The current EPZ’s program establishes benefits of three natures for participating companies: administrative, foreign exchange and tax.

 Administrative – Customs authorities with offices inside the EPZ speeding up the administrative process.  Foreign exchange treatment supported by the law that created the EPZ.  Tax – Federal and State Tax Suspension of the purchase / import goods.

Currently, 22 EPZ’s projects are authorized and are spread over eighteen Brazilian states. The Manaus Free Trade Zone is the best known in Brazil. The ALCB and ALCCS are, respectively, the Free Trade Zones of Brasiléia and the Free Trade Zone of Cruzeiro do Sul. Both of them are situated in the Brazilian State of Acre. The ALCB and

116 How to Export - Pakistan

ALCBV are, respectively, the Free Trade Zones of Bonfim and the Free Trade Zone of Boa Vista. The ALCGM is the Free Trade Zone of Guajará-Mirim. The ALCT is the Free Trade Zone of Tabatinga. The ALCMS is the Free Trade Zone of Macapá and Santana.

6.11.10 Useful Links

Detailed information regarding the benefits at each trade zone can be obtained from: www.thebrazilbusiness.com/article/free-trade-zones-in-brazil

Other useful links are;

 Export Guide: www.gov.uk/Government/publications/exporting-to-pakistan/doing- business-in-pakistan-pakistan-trade-and-export-guide  Taxation Guide: www.home.kpmg.com/content/dam/kpmg/pdf/2015/10/pakistan- 2015.pdf  Pakistan’s Custom Regime: www.pdf.usaid.gov/pdf_docs/PA00K24S.pdf  How to Import into Brazil: www.fkg.se/wp/wp-content/uploads/2014/02/how-to-import-into- brazil.pdf  Brazil Export Guide: i. www.connectamericas.com/sites/default/files/content- idb/Brazil%20Export%20Guide.pdf ii. www.paklawyer.com/wp- content/uploads/2016/09/Import_Export_Documentation.pdf iii. www.tdap.gov.pk/bi_lateral_trade_analysis.php iv. www.bsoforum.com/business-registrations/importsexports- procedures v. www.2016.export.gov/pakistan/tradeevents/localtradeevents/ind ex.asp vi. www.imf.org/external/np/fin/tad/query.aspx vii. www.epza.gov.pk viii. www.epza.gov.pk/incentives ix. www.epza.gov.pk/facilities x. www.epza.gov.pk/guidelines xi. www.epza.gov.pk/epza-rules xii. www.epza.gov.pk/custom-epz-rules

117 How to Export - Pakistan

7. TRANSPORTATION INFRASTRUCTURE

7.1 Domestic Infrastructure

Pakistan has a very diversified terrain, which includes coastal environments, deserts, farming terrain, mountains and high altitude plateaus. This makes transportation and infrastructure slightly challenging. But Pakistan has good road, railway and airport infrastructures that connect nearly all parts of the country. The distant and mountainous parts of Pakistan are often only connected through airports, but road conditions are improving. Major urban centres are connected through air, motorways and expressways.

China launched the China-Pakistan Economic Corridor (CPEC), a project that will link Pakistani and Chinese producers and consumers to at least 50 countries. Envisioned to become a part of the One Belt One Road (OBOR) / Maritime Silk Route, this initiative has attracted the interest of many companies that are exploring opportunities to join mega projects under the CPEC and OBOR platforms.

Rail and road projects have been designed to link with Afghanistan and Central Asia, and to extend railway tracks to Iran and Turkey. The Government intends to allocate more resources on infrastructure. A proposal for a partnership agreement with the International Finance Corporation (IFC) has been made with the objective of creating a Pakistan Infrastructure Bank (PIB) of USD 1 billion paid-up capital.

Figure 28: Islamabad-Lahore Motorway, Pakistan

The transport sector contributes to 10% of Pakistan’s GDP and 6% of the national employment. It facilitates other sectors of the economy through agglomerations, spatial transformation and domestic and international trade. Road transport is a convenient and common choice for domestic trade.

118 How to Export - Pakistan

The trucking sector absorbs 96% of the total freight traffic and comprises small fleet owners owning less than five vehicles. Most trucking companies are located in Karachi. The National Logistics Cell (NLC) is the largest public sector organization engaged in the transport of goods at national level. Pakistan has three main seaports and eleven domestic / international airports. The seaports are Karachi, Port Qasim and Gwadar. Airports include Karachi, Islamabad, Lahore, Sialkot, Peshawar, Faisalabad, Gwadar, Multan, DG Khan, Rahim Yar Khan and Quetta.

7.1.1 Roads

Over 96 percent of inland freight and 92 percent of the passenger traffic is facilitated by road networks. As of March 2017, the total length of road network was 264,401 kilometres. This includes GilgitBaltistan (GB) and Azad Jammu Kashmir (AJK). It consists of all the highway, expressway, motorway and strategic routes. Provincial highways and roads under local administration constitute the remainder of the road network. These include but are not limited to Cantonment Boards, Municipal Corporations and Local Development Authorities. About 40.9% of all roads are in Punjab, 30.9% in Sindh, 16.3% in Khyber Pakhtunkhwa and 11.3 % in Baluchistan. Azad Jammu and Kashmir has only 0.6% of road network, since it is predominantly hilly.

The National Highway Authority (NHA) is in charge of operations and maintenance. Presently, the NHA network consists of 39 highways, expressways, motorways and strategic roads with a stretch of 12,131 kilometres. It is currently managing 50 projects worth approximately PKR 1,605.6 billion (USD 15.29 billion). It runs 80% of the commercial traffic and N-5 (National Highway-5) is responsible for 65% of this load.

Table 76: Estimated Length of Roads in Provinces (Km) Sindh Khyber GB & Total Years Category Punjab Baluchistan Pakhtunkhwa AJK Total 107,805 81,385 42,980 29,655 1,590 263,415 2012-13 Low Type 33,090 24,685 13,140 20,525 470 91,910 High Type 74,715 56,700 29,840 9,130 1,120 171,505 Total 107,973 81,493 43,035 29,692 1,592 263,755 2013-14 Low Type 32,729 24,415 12,996 9,030 465 79,635 High Type 75,214 57,078 30,039 20,662 1,127 184,120 Total 107,992 81,543 43,072 29,742 1,593 263,942 2014-15 Low Type 32,428 24,215 12,846 8,930 460 78,879 High Type 75,564 57,328 30,226 20,812 1,133 185,063 Total 108,085 81,630 43,117 29,785 1,595 264,212 2015-16 Low Type 31,255 23,417 12,230 8,560 458 76,020 High Type 76,830 58,213 30,787 21,225 1,137 188,192 2016-17 Total 108,155 81,681 43,151 29,817 1,597 264,401 (July- Low Type 31,270 23,425 12,336 8,580 459 76,070 March) High Type 76,885 58,256 30,815 21,237 1,138 188,331

119 How to Export - Pakistan

Figure 29: A Typical View of Grand Trunk Road, Pakistan

7.1.2 China Pakistan Economic Corridor (CPEC)

To facilitate smooth and efficient movement of goods and services, the NHA is responsible for planning and developing CPEC through connections from Khunjerab in the north to Gwadar port in the south. Currently, NHA is managing projects worth PKR. 700 billion.

Details of CPEC routes are as under:

Western Alignment: Total Distance 2,463 Km Khunjerab - Burhan (Hakla) - DI Khan (Yank) - Zhob - Quetta - Surab - Hoshab - Gwadar.

Central Alignment: Total Distance 2,417 Km Burhan (Hakla) – Pindigheb – KotAddu - DG Khan - Rajanpur – Wangu Hills – Khuzdar - Basima - Hoshab - Gwadar.

Eastern Alignment: Total Distance 2,686 Km Khunjerab - Thakot - Mansehra -Burhan – PindiBhatian - Faisalabad - Multan - Sukkur -Shikarpur – RatoDero - Khuzdar - Basima – Hoshab - Gwadar.

Through CPEC, the Gwadar port can potentially serve as a secure outlet, storage and trans-shipment hub for Middle Eastern and Central Asian oil and gas suppliers.

The countries and regions covered under CPEC have a cumulative population of 4.4 billion and an economic volume of USD 21 trillion. This amounts to 63% of the population and 29% of the World’s economic volume, respectively. Construction timelines were set from 2014 to 2030. CPEC will become a primary gateway for trade among China, Africa and the Middle East.

120 How to Export - Pakistan

Figure 30: National Highways, Motorways and Strategic Road Maps

Figure 31: China Pakistan Economic Corridor-Route Map

121 How to Export - Pakistan

Figure 32: Major Projects along China-Pakistan Economic Corridor (CPEC)

122 How to Export - Pakistan

7.1.3 Pakistan Railways

Pakistan Railways (PR) is a Government entity covering 7,791 kilometres with 1,732 passenger coaches, 451 locomotives (DL 439 + Steam 12), and 15,948 freight wagons. In terms of long haul and mass scale traffic mobility, it offers more advantage over road transport for passenger and freight movement. Yet road transport development in the past 20-30 years has made it a competitor and consequently reduced railways’ market share. However, with increased availability of functioning locomotives since 2011, operational performance has progressed. According to 2016 records, PR constitutes 4 percent of freight traffic and 6 percent of passenger traffic.

Figure 33: A View of a Train in Punjab, Pakistan

For the fiscal year 2016-17, the Government has allocated PKR. 41 billion for further development of Pakistan Railways. It is procuring 55 locomotives from China in 2017. China is interested in fully financing over USD 8 billion for upgrading PR’s Mainline (ML-1). For this it is ready to increase the earlier CPEC-committed amount of USD 51.5 billion to USD 54 billion. Without the participation of other multilateral or bilateral donors, China aims to complete this rail project within the next three to four years.

Table 77: Passenger and Freight Traffic 2016-17 S.# Subject 2011-12 2012-13 2013-14 2014-15 2015-16 July - March Number of 1 Passenger 41.100 41.957 47.690 52.951 52.192 38.950 Carried (Million) Passenger Traffic 2 16,093 17,388 19,778 20,288 21,201 17,470 Km (Million)

123 How to Export - Pakistan

Table 77: Passenger and Freight Traffic 2016-17 S.# Subject 2011-12 2012-13 2013-14 2014-15 2015-16 July - March Freight carried 3 1.323 1.016 1.610 3.600 5.001 3.82 Tonnes (Million) Freight Tonnes 4 402 419 1,090.332 3,301.438 4,773.548 3,385.410 Km (Million) Gross Earning 5 15,444 18,070 22,800.217 31,924.757 36,581.865 26,268.070 (PKR. Million) Source: (Pakistan Railways)

Two major projects include the Kashgar-Gwadar and Kashgar-Karachi Train Projects. The former will be located in the undeveloped northern part of Pakistan, where there is no railway facility. This line is still at the planning stage and is expected to be completed by 2030. The second route will run through established cities like Islamabad, Peshawar, Lahore, and Karachi. This work is expected to be completed by 2019. CPEC also includes three other railway domestic projects including Karachi Circular, Peshawar Mass Transit and Quetta Mass Transit projects.

New Initiatives

i. Under the patronage of Public Private Partnerships, Pakistan Railways has begun luxury train services, especially to cater to the business community. ii. PR has engaged the private sector in managing terminal facilities including dry ports. Prem Nagar in Lahore is the first successful joint venture model between PR and two private parties. iii. CPEC’s Early Harvest Projects (EHP) includes fast track preparatory work on the Mainline-1 (ML1) up-gradation, dry port construction and cargo handling facilities. iv. China and Pakistan are signing a framework agreement on the establishment of PR’s Havelian Dry Port. v. E-Ticketing has been introduced to facilitate customers.

Table 78: Domestic and International Railway Routes Main Domestic Railway Routes International Railway Routes Karachi–Lahore Iran – Taftan - Quetta Karachi–Faisalabad India – Dehli – Lahore Karachi–Rawalpindi Afghanistan – Kabul – Peshawar Karachi–Peshawar China – Kashgar – Gwadar Rawalpindi–Quetta Turkey – Istanbul–Tehran (Iran) –Islamabad Lahore–Quetta Lahore–Rawalpindi Karachi–Quetta Lahore–Faisalabad Lahore–Sialkot

124 How to Export - Pakistan

Figure 34: Pakistan Railways Network Map

7.1.4 Waterways

Pakistan is gifted with a well-developed riverine and canal system extending from Sindh to Khyber Pakhtunkhwa with a horizontal and vertical coverage of approximately 30,000 kilometres. For centuries it has been used for transportation but there was no cargo movement on the waterways and, after independence, the Government invested no efforts into utilizing the system strategically.

A group of private sector entrepreneurs took the initiative of developing the potential of Pakistan’s waterways to transport goods and passengers. The Government approved the incorporation of the Inland Water Transport Development Company (IWTDC) and allocated funds to initiate the project.

The 200-kilometer stretch along the Northern Indus is a pilot project aimed at improving the efficacy of this mode of transport. An inland water transport system is expected to be established along the corridor of the Indus River from Port Qasim (Karachi) to Nowshera(KP).

125 How to Export - Pakistan

Figure 35: Pakistan Water Ways Network

7.1.5 Maritime Ports and Connections

The federal administrative authority responsible for the facilitation of the ports and shipping industry is the Ministry of Ports and Shipping. It provides policy guidelines to maintain safety standards and support port and shipping development initiatives. The Federal Minister for Ports and Shipping assisted by the Secretary for Ports and Shipping, lead this ministry. The Director General Ports and Shipping represents the Ministry in Karachi.

Wings / Attached Departments of the Ministry

 Gwadar Port Authority www.gwadarport.gov.pk  Government Shipping Office www.shippingoffice.gov.pk  Karachi Port Trust www.kpt.gov.pk  Mercantile Marine Department www.mercantilemarine.gov.pk  Pakistan Marine Academy www.marineacademy.edu.pk  Pakistan National Shipping Corporation www.pnsc.com.pk  Port Qasim Authority www.portqasim.org.pk  Ports and Shipping Wing, Karachi www.marineacademy.edu.pk

More than 95 per cent of Pakistan’s total freight trade is seaborne. Hence the Ministry of Ports and Shipping focuses on modernization and corporatization in

126 How to Export - Pakistan

order to introduce corporate concepts in Ports, rationalize tariffs to be competitive in the region, introduce modern technology and maintain an updated database that would facilitate initiatives based on present day trends. It also aims to revive ship- owning in the private sector by addressing barriers or challenges, and enhancing the tonnage and profitability of Pakistan National Shipping Corporation (PNSC).

The Port of Karachi

The Karachi Port occupies a strategic location in the Arabian Sea. It extends from the straits of Hormuz to India’s border, is 11.5 kilometres long and has a 12.2 meter-deep approach channel that facilitates safe navigation to tankers up to 75,000 DWT. The premier port of Pakistan, it supports an estimated 75% of the entire national trade. It has 30 dry and 3 liquid cargo handling berths. The distance between Karachi Port and the Port of Santos in Brazil is approximately 9,435 nautical miles. Travelling time can range from 11 to 40 days.

Port administration is the responsibility of the Karachi Port Trust (KPT). KPT manages two container terminals, namely Karachi International Container Terminal (KICT) and Pakistan International Container Terminal (PICT) and one silos terminal. PICT and KICT are considered to be state-of-the-art terminals.

Karachi port is handling approximately 650,000 TEUs and 26 million tonnes of cargo per annum. Details are presented below:

Table 79: Port of Karachi Capacity Category Capacity UOM Million tonnes Liquid cargo 14 Dry cargo 12

In summary, the Karachi Port provides the following services:

1. Ship handling 2. Discharging / Loading of cargo 3. Storage of cargo 4. Clearance of cargo 5. Security / Safety

Table 80: Cargo, Container Handling & Ship Movement at KPT (2016-17) TYPE OF CARGO / CARGO/ CONTAINERS CONTAINERS IMPORT (MILLION TONNES) Dry General Cargo 18.575 Dry Bulk Cargo 10.059 Total Dry Cargo 28.634

127 How to Export - Pakistan

Table 80: Cargo, Container Handling & Ship Movement at KPT (2016-17) TYPE OF CARGO / CARGO/ CONTAINERS CONTAINERS Liquid Bulk Cargo 14.004 Total 42.638 EXPORT (MILLION TONNES) Dry General Cargo 7.923 Dry Bulk Cargo 0.617 Total Dry Cargo 8.54 Liquid Bulk Cargo 1.316 Total 9.856 IMPORT + EXPORT (MILLION TONNES) Dry General Cargo 26.498 Dry Bulk Cargo 10.675 Total Dry Cargo 37.174 Liquid Bulk Cargo 15.32 Grand Total 52.493 CONTAINER HANDLING (MILLION TONNES) No. of Import Teus 1.077 No. of Export Teus 1.032 Total Teus65 2.109 SHIP HANDLING (IN NOS.) Container Ships 757 Bulk Cargo Ships 244 Gen. Cargo Ships 379 Oil Tankers 541 Total 1921

KICT has been in operation since 1998, can manage 300,000 Twenty foot Equivalent Units (TEUs) per annum and can handle container ships up to 11-metre draught. The Quay length is 600 meters and is divided into two container berths. The terminal has three Panamax cranes and one post-Panamax crane. Pakistan's leading container terminal, KICT lies on the west of the Indus Delta on the Arabian Sea. It has three berths with modern container-handling facilities and is a member of Hutchison Ports. The port and related services division of CK Hutchison Holding Limited (CK Hutchison) is a global leader in port investment, development and operation. Its port operations cover 48 ports in 25 countries.

PICT at East Wharf berths 6-9 and has a 350,000 TEUs per annum handling capacity of container ships up to 11.5-metre draught. It is equipped with two Panamax cranes and has a total quay length of 600 meters, which is divided into two container berths.

65 Twenty foot Equivalent Units

128 How to Export - Pakistan

Their privately-operated competitor is Al-Hamd International Container Terminal (AICT). It is located west of the Layari River, is adjacent to the Sindh Industrial Trading Estate (SITE) and the new Hawkes Bay Road truck stand, and is close to the RCD Highway, the Super Highway and the future Layari Bypass.

Figure 36: Cargo Ships at Karachi Port, Pakistan

There are three oil piers, two ship repair jetties and a facility for shipyard and engineering. The facility includes a large shipbuilding hall, three foundries, three shipbuilding berths and two dry-docks. The shipyard facilitates shipbuilding and repair for commercial and military clients on a 29-hectare (70 acres) site at the West Wharf.

Table 81: Cargo Handling at Karachi Port Trust in Thousand Tonnes (000 Tonnes)66 Period Exports Imports Total 2011-12 11,674 26,201 37,875 2012-13 12,150 26,700 38,850 2013-14 11,007 30,343 41,350 2014-15 10,422 33,000 43,422 2015-16 9,786 40,259 50,045 2016—17 (July – March) 7,462 31,560 39,022

Expansion Plans

Severe congestion is a major impediment of cargo flow. Recently upgraded, the Karachi Fishing Harbor is next to West Wharf and separately administered by the port. It serves several thousand fishing vessels. The West Wharf also consists of a ship repair facility/shipyard and a naval dockyard. South of the port are the Karachi Naval Base and the Kiamari Boat Club. A second fishing harbor is located 18 kilometers away at Korangi. Congestion has been further improved by transferring some naval vessels to the new Ormara naval base.

66 Karachi Port Trust (Pakistan K. P.)

129 How to Export - Pakistan

KPT has planned further development of the port to enhance facilities. As a start, the channel is being dredged to 13.5 meter deep to serve the 12-metre draught vessels at all tides. At KiamariGroyne, dredging to 16.5 meters will be completed to enable docking of vessels up to 300 meters length.

Port Qasim

Port Qasim is managed by the Port Qasim Authority. The 2nd deep sea industrial- cum-commercial port, it is located in the Indus Delta region at 28 nautical miles of south-east Karachi. Port Qasim caters to more than 40% of Pakistan’s seaborne trade requirements. Accessibility is 24/7. It is a 45 km long channel with channel buoys of up to 11 meter draught vessels. The port covers 12,000 acres (49 sq. km) and hosts the operations of many industrial zones. In addition to Pakistan Steel Mills (PSM) and Karachi Electric Supply Corporation (KESC) Bin Qasim Power Plant, approximately 80% of Pakistan's automotive industry is located at Port Qasim. Two major nearby industrial areas, namely, the Export Processing Zone (Landhi) and Korangi Industrial Area have direct waterfront access. An estimated 60% of Pakistan’s exports and imports originate from these areas.

Table 82: Cargo Handling at Port Qasim in Thousand Tonnes (000 Tonnes) Period Exports Imports Total 2012-13 7,047 17,754 24,801 2013-14 7,699 18,076 25,775 2014-150 8,405 21,608 30,014 2015-16 7,464 25,857 33,321 2016—17 (July – March) 5,693 21,604 26,676 Source: Port Qasim Authority (Pakistan P. Q.)

Table 83: Goods Handling Wheat Import & Export Chemicals Imports only Coal Imports only Containers Import & Export Crude Oil Imports only Furnace Oil Imports only Edible Oil Imports only Iron Ore Imports only Rice Export only General Cargo Imports & Exports Cement Export Sugar Import

Berths 2 and 4 in Marginal Wharf, host two covered transit sheds of 10,000 m2 each. Three term storage areas are also available. Jinnah International Airport is located 30 km away and six railway tracks link a 14 km railway link to the National Railway Network.

130 How to Export - Pakistan

Gwadar Port

Gwadar Port is Pakistan’s third port. It is located on the Arabian Sea shores of Baluchistan, approximately 533 km away from Karachi and 120 km from the Iranian border. The port is situated in the outskirts of the Straits of Hormuz, near the key shipping routes associated with the Persian Gulf, used by mainline vessels connecting to Africa, Asia and Europe. It holds high commercial and strategic significance and is controlled by the Gwadar Port Authority (GPA). The port is a main CPEC gateway which is why GPA has been actively participating in its planning and appraisal processes since 2013-14.

Figure 37: Gawadar Port, Pakistan

Gwadar Port is a warm water deep-sea port. Phase-1 has been developed jointly by Pakistan and China with a total cost of USD 288.0 million. It was inaugurated in March, 2007, is functional with three multipurpose berths of 200 meters length dredged to 14.5 meters in depth alongside the berth, handling a ship of 50,000 DWT capacity.

It is expected that the Gwadar Port will be the largest of Pakistan by 2055, with a 50 km sea front and 10,000 hectares of port backup area. In 2013, the port’s Concessional Rights were transferred from the Port of Singapore Authority (PSA) to the China Overseas Ports Holding Company Ltd. (COPHCL). COPHCL has initiated

131 How to Export - Pakistan

the “recovery” of existing available infrastructure and equipment at the port. An operational plan was submitted after consultation with GPA.

From 2008 till date, Gwadar Port has managed an estimated 6.329 million metric tonnes of dry bulk cargo, which comprised wheat and urea by 201 ships. Port operations are as follows:

Table 84: Gwadar Port Trust Capacity in Thousand Tonnes (000 Tonnes) March –July 2017 Capacity Total Import 53,320 Total Export 1,925 Total 55,245

The potential for optimum utilization has started being explored due to the Government-to-Government CPEC agreements. These initiatives will benefit from the regional trade connections among Western China, Central Asian Republics (CARs) and Afghanistan.

Port connectivity with the highway network has been addressed through the Gwadar Port Eastbay Expressway project, which will be funded by CPEC. This project will connect the Gwadar Port with the Makran Coastal Highway. It will pass along the east bay of Gwadar City, with a total length of 18.98 kilometers, which includes 4.3 kilometers along-the-shore and 14.6 kilometers on-shore sections. The project also includes a double track rail link along the expressway. The completion date is December 2019.

Table 85: Current Port Facilities at Gwadar Port Port Area 64,000 sq. m Container stacking area 48,278 sq. m Reefer Cargo space(400 points) 367sq. m Empty container stacking area 6,875 sq. m Storage yard 28,669 sq. m Transit shed 3,750 sq. m Hazardous cargo storage yard 1,800 sq. m Control tower (foot print only) 1,536 sq. m Buoy yard 1,500 sq. m Generator building 593 sq. m Maintenance workshop (general) 1,440 sq. m Vehicles Servicing Garage 450 sq. m

7.1.6 Air

Pakistan has 41 airports, of which only 7 are commercially important. These include Karachi, Lahore, Islamabad, Peshawar, Quetta, Multan and Sialkot airports. The other smaller airports are mainly used for domestic transportation of passengers. Airlines handle local air transport for passengers or commodities transport.

132 How to Export - Pakistan

Pakistan International Airlines (PIA)

Pakistan International Airlines (PIA) is Pakistan’s national airline, flying to 50 destinations of which 28 are international and 22 are domestic. Its market share was 27 percent in the international and 65 percent in the domestic air travel market during 2016.

The Government plans to attract private sector participation, while ensuring that majority shares remain under management control, for which it is separating PIA's core and noncore activities. The transaction structure for offering a minority stake to a strategic partner and/or the public is in process and the bidding process will be completed by March 2018.

Figure 38: An Aircraft of Pakistan International Airlines

There has been a recent increase of 63 percent from 22 to 36 in its fleet. PIA has signed agreements for the acquisition of 20 percent aircraft on dry lease i.e. 13 A- 320s and 05 ATRs- 72.

Table 86: Overall Performance of PIA Indicators Units Year 2014 Year 2015 Year 2016 Number of PIA Fleet 34 38 38 planes Route Km 389,445 367,251 382,057 Available Seat million Km 16,536 16,666 19,196 Passenger Load Factor in percent 72 70.3 71.6 Revenue Flown 000 Km 61,389 67,630 79,842 Revenue Hours Flown Hours 101,556 111,455 131,838 Revenue Passengers 000 number of 4,202 4,393 5,487 Carried passengers.

133 How to Export - Pakistan

Revenue Passengers million Km 11,903 11,711 13,751 Revenue Tonne million Km 1,241 1,191 1,375 Revenue Load Factor in percent 52 48.9 49.2 Operating Revenue PKR. million 99,519 91.269 89,842 Operating Expenses PKR. million 11.048 121.222 125,961 Available Tonne million Km 2,396 2,435 2,798

The Civil Aviation Authority (CAA) (www.caapakistan.com.pk) is in charge of the operational activities of all the international airports of Pakistan. Passengers are assisted according to international standards and rules which are defined by the authorities.

PIA, Shaheen-Air, Air-Blue, Indus-Air and Serene Air are the major Pakistani airlines carrying out-flight operations for domestic and international destinations.

7.1.7 Airports and International Connections

Civil airports in Pakistan are operated by the Pakistan Civil Aviation Authority, with the exception of Sialkot International Airport, which is the first private airport in Pakistan and South Asia, open to domestic and international civil aviation. It is owned and operated by the Sialkot Chamber of Commerce & Industry. The list of airports for travelling and cargo are provided below and also are marked in the map on next page.

Table 87: List of International Airports in Pakistan Name of Airport City – Provinces Quaid-e-Azam International Airport. Karachi- Sindh AllamaIqbal International Airport. Lahore – Punjab Quetta Airport. Quetta – Baluchistan Multan International Airport. Multan – Punjab Peshawar International Airport. Peshawar – Khyber Pakhtunkhwa 1. Benazir Bhutto International Airport 2. Quaid e Azam International Airport Islamabad – Federal Capital (to be opened in 2018) Bahawalpur Airport. Bahawalpur – Punjab Dera Ghazi Khan Airport (DG-Khan). Dera Ghazi Khan - Khyber Pakhtunkhwa Gwadar Airport. Gwadar – Baluchistan Faisalabad Airport. Faisalabad - Punjab Turbat International Airport Turbat - Baluchistan Sialkot International Airport Sialkot - Punjab ShaikhZayed International Airport Rahim Yar Khan – Punjab

Of all the airports, Karachi, Lahore and Islamabad airports are the most connected airports and are well equipped with travelling and air cargo facilities. The airports are linked to most of the international airports through Pakistan International Airlines and other airlines. Towards south east, Thai Air is the most viable option while towards the mid-eastern destinations, different options are available including

134 How to Export - Pakistan

Pakistan International Airlines, Emirates, Etihad etc. Turkish Airlines also provide a viable traveling option towards west, apart from all the mid-eastern airlines which also provide travelling routes towards west.

The airports are well equipped with different services including protocol and porter services, emergency and medical services, post offices, ATMs, Banks, Money Exchangers, free-Wi-Fi and internet, cab services, different hotel counters, travel agents and cargo services.

The principal routes to Brazil include those through mid-eastern connecting airports or through European ones. However, it is cost effective to select a Middle Eastern airline e.g. Etihad Airways or Emirates, because they often lead to less distance and consequently have less cost/ fare. A connection through China can also be done, however it is not well established and does not provide many choices. Other eastern airlines operating from Pakistan e.g. Thai Air do not provide options to Brazil.

The most important routes with significant trade flows to other countries is Dubai. Dubai’s bulk of aerial trade with Pakistan is increasing rapidly and it also provides onwards trade routes through aerial and sea routes for trade with Brazil. The cost is low compared to a route flowing through a European or eastern destination that are not well established or are costly.

Figure 39: Airports of Pakistan

135 How to Export - Pakistan

8. SALES

8.1 Distribution Channels

Like in most developing countries, there are four principal distribution channels in Pakistan:

a. Pakistani manufacturers selling to wholesalers who in turn sell to retailers. b. Pakistani manufacturers selling through their owned (or franchised) retail outlets, cutting out the wholesalers. c. Pakistani importers selling to retailers. d. Pakistani importers having their own retail outlets, or selling directly to commercial users of products such as industrial raw materials.

The wholesalers, distributors or importers (middlemen) play an important role in Pakistan’s industry and trade. They are the most effective connection between the producers and end users of different products. There are many companies that

136 How to Export - Pakistan

operate in this segment. Some of them specialize in particular lines of goods such as textiles, industrial raw materials, shoes and chemicals while others function as general order suppliers/importers dealing with multi-products.

A list of distributors operating in any line of trade can be obtained from the relevant Chamber of commerce and industry. Contact details of the Federation of Pakistan’s Chambers of Commerce and Industry are provided in Annex 9.2. The Embassy of Brazil in Islamabad can also provide support in this.

Brazilian exporters should connect the leading Pakistani importers of their line of goods. After evaluating them, the exporters can select their main or sole distributor in Pakistan. Suitable legal documentation to this effect must be collected in advance to avoid disputes at a later stage.

8.2 Wholesale and Retail

Wholesale and retail trade is the 3rd largest sector in Pakistan followed by agriculture and manufacturing. It is also the second largest employer as it engages approximately 16% of the total labor force. The retail sector comprises 33% of the service sector and 18% of its total GDP. The retail industry is valued at USD 42 billion. Retail sales crossed USD 132 billion in 2017.

Potential and Strengths

 Globally Pakistan ranks as the 6th most populous country retail investment destination for thousands of local and foreign investors.  Almost 73% of the Pakistani population is below 35 years of age. A reasonable portion of this group is increasingly becoming part of the active income earners of society and hence expanding the middle-income class.  The daily income/expenditure of the middle class ranges from USD 2 to USD 20 per person per day. Pakistan comprises approximately 76.7 million to 81.3 million people within this category.  Urban and total population continues to rise which implies increased demand for and access to goods and services.  Trade globalization and liberalization are nurturing consumerism.  The retail industry continues to grow due to credit availability, online shopping convenience and increased access to social media by retailers.  Pakistan is becoming home to new retail formats, attracting large international wholesalers like Metro and Carrefour, replacing old trends such as traditional retail clusters of small sized businesses.  Retail developments have created demand for commercial real estate. Low share organized retailing, relatively low real estate rents and growing consumer aspirations are attracting investments in retail and real estate.

Investment Opportunities

137 How to Export - Pakistan

 Retail investment opportunities in various sectors such as food, apparel, footwear, health & beauty, consumer electronics and home furnishings, are available via independent retailing, franchising, joint ventures and strategic licensing agreements.  There are numerous real estate investment prospects in the construction of large shopping complexes in major cities of Punjab such as Lahore. The availability of thousands of square feet of floor area with amenities including escalators, wide corridors, clean toilets and parking spaces is an attractive opportunity for international chains.

Different websites provide detailed information about diversity of wholesalers and distributors. These websites are referred in the footnote67 below.

8.2.1 Retail Ownership Formats in Pakistan

Entrepreneurs have many choices of retail business ownership forms. The selection depends on the nature of the retailer and the preferred mode of operation. Some popular retail ownership formats are:

 Independent retailers: these are businesses that are privately owned. Pakistan has a huge market of single-store operations, and they can offer both high risk and high rewards.  Franchising: There are two types of franchises: i. Product and Trade Name Franchises ii. Business Format Franchising  Joint ventures  Strategic Licensing Agreement

The Government supports franchise deal initiatives by not imposing restrictions on investors who pursue this option. Foreign investors have to inform the Board of Investment and the State Bank of Pakistan about their business for basic formalities including repatriation of franchise fee or declaration of accrued profits.

Raffles is a noted example of retail licensing agreements in Pakistan. Since 2006, it is the authorized distributor and seller of Apple products. In 2008 it also entered a joint venture with the first Apple retail store in Lahore.

Figure 40: Pakistan Retail Sector Census - Retail Sector Snapshot

67 http://www.businessbook.pk/category/distributors-1024 https://www.businesslist.pk/category/wholesale-traders/pakistan

138 How to Export - Pakistan

8.2.2 Fast Moving Consumer Goods (FMCG) Channels in Pakistan

Table 88: FMCG Channels and Contribution FMCG Channels Contribution Specialty Channels Contribution Hyper market 0.001% Baby/Mother Care 0.01% General Store 31.30% Beverage Semi Wholesaler 0.11% Kiryana Store (Grocery shop) 23.28% Café 0.02% Bakeries/Sweet Shop 1.75% Cinema 0.01% Departmental Store 0.06% Cosmetic stores 2.87% Super Markets 0.02% Fast Food Restaurant 0.35% General-Medical Store 1.34% Highway hotel 0.07% Pan/Cigarette Shop 3.62% Ice Cream Parlour 0.04% Petro Mart 0.13% Restaurants (Fine Dine) 0.25% Exclusive Medical Store 2.46% Tobacconists 0.01% Kiosk/Hawker 3.81% Variety/Minyari 1.04% Eating places 1.56% Wholesaler 0.77% Local Food Stand / Snack shop 2.02% Others 0.78% Tea Stalls 1.34% Total 79.54% Canteen 0.26% Specialty Channels CSD / Fair Price Shop 0.26% Baby/Mother Care 0.01%

Table 89: Telecommunications Sector (Contributions) (Exclusive) Telecom Products Channels Contribution

139 How to Export - Pakistan

New Mobile Phone Handset Shops 1.73% Used Mobile/Mobile Repair Shops 3.50% Mobile Accessories Shops 4.79% PCO/Phone Recharge Shops 6.39% Video/CD Shops 1.34% Internet Café 0.67% Books/Stationary 2.04% Total 20.45% Source: Islamabad Chamber of Commerce and Industry

Table 90: Nature of Retail Businesses and Numbers Type of Business Number Percentage Type of Business Number Percentage Pan/Cigarette Baby/Mother Care 74 0.010% 28,035 3.618% Shop Bakeries/Sweet Shop 13,566 1.751% Petro Mart 970 0.125% Beverage Semi Restaurants (Fine 846 0.109% 1,947 0.251% Wholesaler Dine) Café 151 0.019% Super Markets 191 0.025% Canteen 1,986 0.256% Tea Stalls 10,415 1.344% Cinema 54 0.007% Tobacconists 95 0.012% Local Food Stand / 15,614 2.015% Variety/Minyari 8,092 1.044% Snack shop Cosmetic stores 22,201 2.865% Wholesaler 5,981 0.772% CSD / Fair Price Shop 1,989 0.257% Books/Stationary 15,776 2.036% Departmental Store 493 0.064% Internet Cafe 5,222 0.674% Mobile Eating places 12,104 1.562% Accessories 37,097 4.788% Shops Exclusive Medical PCO/Phone 19,055 2.459% 49,530 6.392% Store Recharge Shops Used Mobile/ Fast Food Restaurant 2,726 0.352% Mobile Repair 27,115 3.499% Shops General Store 242,520 31.299% Video/CD Shops 10,353 1.336% New Mobile General-Medical Store 10,366 1.338% Phone Handset 13,384 1.727% Shops Kiosk/ Highway Hotel 578 0.075% 29,557 3.815% Hawker Hyper market 9 0.001% Kiryana Store 180,384 23.280% Ice Cream Parlour 307 0.040% NA 18 0.002% Others 6,052 0.781%

All major cities of Pakistan have a wholesale market that is fairly developed. Product specific dedicated markets and specific wholesalers comprise this segment of the distribution network. In order of size, the major distributors of wholesale goods are Karachi, Lahore (Shah Alam Market and Azam Market), Rawalpindi, Faisalabad, Gujranwala and Peshawar.

140 How to Export - Pakistan

Figure 41: A Random General Store in Pakistan

8.2.3 New Sales Channels

Online sales have grown massively in over the past 2 years. The 3G telecom service led to an immediate surge in the industry. Three of the four mobile networks have 4G/LTE. Traditional retail industries have begun to explore entry into e-commerce either directly or through marketplaces. Mobile networks are progressing rapidly with innovative approaches and entering the ‘FinTech’ space, which is witnessing new entrants directly. Banks are planning digitization and logistics players are introducing creative ideas. The American e-commerce market is approximately 8-9% of the total retail sales, whereas Pakistan’s e-commerce is under 0.1% of the retail sales. However taking into account market size, an increase is expected in next 5-10 years.

Daraz.com introduced Black Friday in Pakistan in November 2015. In 2016, Black Friday witnessed huge increases in sales revenue, customer acquisitions and the number of participating online sites that offered special discounts. For example, Daraz and Kaymu’s revenue crossed PKR 1 Billion, Yayvo.com received above 60,000 orders and HomeShopping, Symbios, Shophive etc. participated aggressively. Newcomers such as MyGerry’s also used this platform to entry into the e-commerce market. Black Friday left an indelible imprint for offline and online channels. It can be compared with the Singles Day in China, and the Big Sales launched by Indian companies around Diwali.

8.3 Promoting Sales

Two types of sales promotions techniques are popular in Pakistan: trade promotions and consumer sales promotions.

141 How to Export - Pakistan

Generally, maximum schemes are announced during religious festival times. Examples include the holy month of Ramadan and the two Eids68. Seasonal sales are also offered i.e., summer and winter promotional sales, and children’s vacation periods. Usually sales are promoted through electronic and press media.

Participation in specialized trade fairs or exhibitions is another common practice employed by companies.

Figure 42: Top 10 English Newspapers by Revenue

Top 10 English Publication % share by revenue Express Tribune loss, B Recorder gain the business

30.4 24.5

12.9 11.5 8.0 5.1 4.1 3.2 0.3 0.1

Pakistan Advertisers Society

68Two annual religious festivals celebrated by Muslims.

142 How to Export - Pakistan

Figure 43: Top 10 Urdu Publications

Top 10 Urdu Publication % share by revenue 40

16 12 11 6.5 3.2 3 2.1 1.1 0.8

Pakistan Advertisers Society

Pakistan has a network of over 65 television channels, over 100 newspapers, and around 50 specialized journals for different trades. Public and private sector organizations also participate in different cities’ industrial shows and trade fairs, some of which are product-specific.

The advertising consultancy sector is well developed with a large number of specialists (addresses given in Annex 9.9 & 9.10), some of whom specialize in specific product lines. They can be contacted for advice and support on sales promotion and marketing strategy.

Pakistan offers a number of important trade shows and fairs all over the year. These highlight potential exports as well as an opportunity for entrepreneurs from other countries to export to Pakistan. A list of important trade shows and fairs is provided on the website of the Trade Development Authority of Pakistan (TDAP) and its link has been provided in footnote69. An updated list is also available in the Economic Section of the Embassy of Brazil in Pakistan.70

List of other important trade shows and expos is given below;

1. Build Asia-Engineering and Construction industry in Pakistan, Karachi (Annual) 2. GTEX Textile Machinery Expo, Karachi, (Annual) 3. Food, Agri and Livestock, Asia, Karachi (Annual) 4. Auto Asia, Karachi (Annual) 5. Oil, Gas and Power Asia, Karachi, (Annual)

69 www.tdap.gov.pk 70http://islamabade.itamaraty.gov.br/en-us/

143 How to Export - Pakistan

6. ITCN Asia, Information Technology, Telecommunication, E-Commerce, Digital Entertainment, Karachi (Annual) 7. IDEAS, International Defence Exhibition and Seminars (Every 2 years)

A detailed list is also available on the website given in footnote71.

Key Advertising Channels in Pakistan

Like many other countries, Pakistan has various channels for advertising. These include newspapers, TV Channels, FM channels, billboards, SMS services, Social media and door to door leaflets or other similar approaches.

Within Newspapers, major national dailies include:

1. Daily Jang 2. Daily Nawa-i-Waqt 3. Daily The News 4. Daily Tribune 5. Daily The Dawn 6. Daily Times 7. The Nation

News and other channels include:

1. Geo TV (and allied entertainment channels) 2. ARY NEWS (and allied entertainment channels) 3. Samaa News (and allied entertainment channels) 4. Dunya News News (and allied entertainment channels) 5. Dawn News (and allied entertainment channels) 6. PTV (and allied entertainment channels) 7. Hum Masala 8. Express TV (and allied entertainment channels) 9. Abtak 10. Aaj News 11. Royal News

Within FM channels, Pakistan has the following to offer:

1. Radio Pakistan 2. FM 100 3. Hum FM 106.2 4. Ham Awaz 90

71http://www.eventseye.com/fairs/c1_trade-shows_pakistan.html

144 How to Export - Pakistan

5. ITP FM 92.4 6. Power Radio FM 99

There is a long list of local FM Channels operating in different parts of Pakistan, which can be accessed on the PEMRA website72.

Marketing Consultants

A good number of companies have emerged in the last 20 years that provide management and marketing consulting services to businesses from within and outside Pakistan. They engage a diversity of channels, tools and concepts to market products and have innovated within the industry.

A list of marketing consulting companies is available in the below referred web link73.

8.4 Recommendations to Brazilian Companies about Negotiations, Correspondence, and Sales Contracts

8.4.1 Import Negotiations and Agreements

Email, fax, postal correspondence, and formal documents are commonly used for import negotiation and agreements. FOB and CIF are the standard for price quotes. The importer can nominate a representative in Pakistan who will negotiate with local stakeholders as well as the Government. In order of preference, currencies for quotes are US Dollars, UK Pound and the Euro. Terms and conditions in import agreements may vary according to the nature of the imported product.

Generally, agreements are signed on stamp paper with a minimum value of USD 1 (PKR 100) to a maximum depending upon the value of the deal, the legal requirements as well as a consensus between the parties and with the Government.

The following crucial points should be noted with careful attention:

a. Pakistan is a signatory of most of WTO agreements but each international transaction consists of specific and distinct demands that should be fulfilled with due diligence. b. Even though negotiations with Pakistani importers can be conducted from Brazil, a visit to Pakistan is strongly recommended especially in cases where the magnitude of the expected business is huge. c. Relationships should be specified through formal written agreements, which should have expiry dates with possible options of renewal.

72http://www.pemra.gov.pk/ 73https://companylist.org/Pakistan/Keywords/Marketing_Consultants_In/

145 How to Export - Pakistan

d. Careful interaction, initially limited to a pilot experience and detailed evaluation should be the basis for selecting a local agent. e. Opening an office in Pakistan is advisable especially in the cases of large volumes of potential business. Karachi, Lahore and Islamabad are recommended cities for such an office. f. Imports into Pakistan need to be insured. Many insurance companies are engaged in import and export related policies. A Pakistani importer can facilitate this requirement. g. Though pre-shipment inspection is not mandatory for all goods, custom authorities can randomly or selectively identify some transactions for inspection. Generally Pakistan importers arrange the inspection activity via designated internal inspection agencies. h. Brazilian exporters should verify the financial position of the potential distributors they will work with. Checking details related to credit lines for managing imports is important. Pakistani banks provide import financing to local importers. i. The International Chamber of Commerce deals with trade disputes and arbitration between Pakistani and non-Pakistani firms. This detail should be mentioned in any agreement with a Pakistani company.

Sources for further details on conducting business in Pakistan and becoming more comprehensively aware of relevant policies are listed below.

i. For all Trade and Commerce related queries www.commerce.gov.pk ii. Imports in Pakistan from abroad are allowed under Import Policy Order 2009- IPO 2009. Download from the www.commerce.gov.pk website, then follow links at “About us-Downloads- Import Policy Order 2009” iii. Trade Development Authority of Pakistan – www.tdap.gov.pk iv. For all matters relating to Customs, Sales Tax, Federal www.fbr.gov.pk Excise and Income Tax related matters v. Customs Clearances: 24x7x365 days fully automated/computerized speedy clearances with end to www.weboc.gov.pk end solutions.

8.4.2 Designating Agents

Foreign firms intending to conduct business in Pakistan solicit support from local market research firms to provide intelligence and to facilitate distribution. The agents charge a fixed commission ranging from 2 to 10 percent for plant and equipment purchases and from 15 to 20 percent for spare parts. Commissions are calculated on FOB, ex-factory, or CIF basis. Certain agents have suppliers quote net prices to which they add the commission to arrive at the selling price. Agents, who operate as consultants on a retainer basis, charge their fee regardless of the level of total sales.

146 How to Export - Pakistan

Exclusive agency agreement is the most common agreement whereby the supplier agrees to neither appoint another distributor, nor to negotiate sales through any other party. The agent agrees to exclusively handle the supplier’s products only and cannot deal in similar items of other firms. The agent receives commissions on all sales of the product regardless of the channels through which the order is placed. The agent often imports and stocks the products. Such agreements last around one to three years and generally require 30 to 90 days’ notice by either party for termination.

Overseas suppliers often arrange separate payments to the local agent in order to provide after-sales service during and beyond the warranty period. The agent is compensated for providing technical and administrative support services not directly related to sales transactions.

8.4.3 Opening Sales Representations, Subsidiaries and Franchises

Opening an Office

A business can register as sole-trader, partnership, private limited company or public limited company in Pakistan. Foreign businesses typically establish limited companies by registering with Securities & Exchange Commission of Pakistan (SECP). The SECP also ensures that brand names and trademarks used are not misleading or duplicated. A company making any public offer of securities for sale or intending to issue capital is required to obtain approval from the Controller of Capital Issues (CCI).

The company then applies for utilities such as electricity from the local power supply company (WAPDA or K-Electric) and natural gas connection from Sui Northern Gas Pipelines or Sui Southern Gas Company. Telephone connections are installed by PTCL which also provides internet service along with several private ISP (Internet Service Providers) such as Zong, Wi-Tribe, Nayatel, WorldCall, Quebee, Wateen, and Comsats. Cellular service providers include Ufone, Zong, Mobilink, and Telenor; all of these provide 3G and 4G services.

Manufacturing companies with 10 or more employees need to register with the provincial Chief Inspector of Industries under the Factories Ordinance, 1984. Companies also have to register with the Income Tax Department of the Federal Board of Revenue (FBR) and obtain a National Tax Number (NTN). New foreign companies must file the following documents with the Registrar of Joint Stock Companies, Ministry of Finance within 30 days of commencing business:

i. a certified copy of the charter, statutes, or memorandum, and articles of association of the company; ii. the full address of the registered or principal overseas office of the company; iii. the names of the chief executive and directors of the company;

147 How to Export - Pakistan

iv. the names and addresses of persons resident in Pakistan who are authorized to accept any legal notice served on the company.

It will be beneficial for firms to use services of a local legal advisor to ensure compliance with these formalities.

Franchising

In the retailing sector, particularly food and hospitality industry, franchising is very common in Pakistan since it allows a quick entry into the market without hefty capital investment. Using local expertise would allow Brazilian firms to better adjust to market conditions. Foreign firms should be mindful of including quality control assurance, branding and marketing. Conflicts of interest and transfer of skill or technology over time can lead to the emergence of local competitors. In the food chain, quality control is paramount to business success; in Pakistan, all imported food items, particularly meat items must be "Halal".

After conducting market research and soliciting legal advice, a franchise agreement should be drafted to protect mutual interests. The franchisor must be able to retain some direct control over operations, even after transfer of business and technical know-how. Important elements of the agreement include territorial coverage, quality control procedures, duration of the contract, franchise rate, protection of trade secrets, and minimum performance clauses. The firm should register its patents and trademarks in its own name rather than in that of the franchisee.

Common franchise operations in Pakistan include Marriott, Pizza Hut, KFC, Subway, McDonald's, Hardees, Nike Retail, FedEx, Princeton Review, Gymboree, Gloria Jean’s Coffee etc. Franchises are initially set up in large cities (Karachi and Lahore) to have access to bigger markets and then expand to other cities such as Faisalabad, Islamabad and Peshawar.

Forming Joint Ventures

The three main ways to enter the Pakistani market are:

i. creating a private company owned entirely by a foreign firm; ii. creating a public limited company (the foreign firm retains majority control, but floats stocks to ensure public participation); and iii. joint venture of a company in cooperation with local partners who supply expertise, management and capital.

The joint venture may be either a private or a public company. Joint ventures are advantageous for Brazilian investors since there are many local entrepreneurs who have built a substantial base in their industrial enterprises and are seeking to combine their knowledge of local markets with foreign capital and technological know-how. The foreign joint venture partner limits its initial country exposure while

148 How to Export - Pakistan

enjoying the support of a local partner in a new market. Joint ventures have been established in the automobile, electronics, fertilizer and home appliances, financial services, food and consumer product and energy sectors.

Firms which want to delay direct entry into the Pakistan market should consider licensing arrangements with local firms, since this would allow them to gauge if the entry is feasible by judging the initial response to their products.

8.5 E-Commerce

The E-commerce market in Pakistan consists of many sectors. Each sector will be discussed below.

Marketplaces or Multi-Category Stores

 Tier 1 Stores: These consist of multi-retailer and multi-category online stores. Market leaders include Daraz, Alibaba, Kaymu&Yayvo, with other competing e-retailers such as HomeShopping, Symbios, Shophive and Telemart.  Tier 2 Stores: These are already established stores that are trying to enter Tier 1. These include Well.pk, GoTo and The Warehouse.  Tier 3 Stores: These comprise a large group of e-stores competing via a niche category or a multi-category store with a small team and limited marketing budget.  Facebook Stores/Group: This is a large segment with high sales volume. Sheops is leading this group.

Brand Stores: E-tailers such as Khaadi, Ego and Gul Ahmed comprise this segment. Their selling assets are strong brand awareness and sales through brick and mortar. Their volume of sales and basket size (AOV) is high. This is a good testing strategy for new products as it provides a platform for capitalizing on their brand identity without investing in retail locations across the country.

Food/Takeaway Model: This consumes a considerably large market and is monopolized by FoodPanda and EatOye.

Travel, Ticketing & Holiday: Traditionally airlines and other transportation service providers have not depended on e-commerce though they do facilitate some online sales. Jovago sells hotel bookings as well as local airline tickets of PIA, Shaheen&AirBlue. Pakistan Railways made PKR 100 million through e-ticketing in 2 months in 2016.

Ride Sharing: These comprise primarily Uber and Careem with smaller local sites such as Travly.

Classified: These include sites such as PakWheels, Zameen.com, Rozee and OLX.

149 How to Export - Pakistan

Most of these companies do not share data related to sales volume. Hence it is difficult to accurately project the size of the e-commerce market. However, an overall gross revenue of approximately USD 120 million was estimated in 2016 (based on market knowledge and unsolicited data).

8.6 The Market Ecosystem for Brazilian Companies

The online retail market is growing fast annually. In the first 5 months of the financial year 2017 Yayvo exceeded its previous year’s recorded revenues. Other large e-commerce companies have also declared a growth of up to 300% per year.

With growth accelerating in all sectors and estimated to reach a USD 1 Billion revenue by 2020, positive customer experiences have become vital. To ensure continued growth in this industry, companies need to ensure that customers are greeted with above expectation shopping experience.

To do this, Brazilian companies have to enable a great customer service. While a customer will directly interact with one website, that website is reliant on multiple industries and players to ensure a seamless experience is delivered.

 Vendors – without vendors the ecommerce industry would not have any products to display. Vendors are crucial to marketplaces where any delay in receiving the product can ruin the customer experience.  Logistics: Once the product is procured having the right delivery partner is crucial. Factors such as service quality and cost are both equally important as well as providing live tracking data and support.  Payments: Whether the payments are handled by the logistics players through COD – ‘Cash on Delivery’ or by Credit Card merchants, how easy and accessible the payment method is, is crucial for both the customer and the E-commerce player.  Technology: The backbone of the E-commerce site is technology, whether it is just the web store, the seller centre, the warehouse management system or the customer support system. Without the right technology, no ecommerce company can succeed. Whether the technology is custom developed or bought is irrelevant, however its proper usage is crucial for success.  Trust: Only when these elements are working properly will the customer have a good experience and therefore start to build trust. This will result in higher repurchase rates and therefore retention which itself will then attract new customers.

E-commerce is regulated through the Electronic Transactions Ordinance 2002 (ETO), which recognizes and facilitates documents, records, information, communications and transactions in electronic form. The ETO also provides for the legal recognition of electronic or digital signatures.

150 How to Export - Pakistan

9 ANNEXES

9.1 Summary Briefing

Capital: Islamabad

National Language: Urdu

Official/Business Language: English

Religion: Predominantly Islam, others are; Christianity, Hinduism, Sikhs, Ahmadiyya and Zoroastrians

Currency: Pak Rupee (PKR) USD 1= PKR 105.3 (October 31, 2017) BRL 1 = PKR 32.23 (October 31, 2017)

Country Calling Code: +92

Neighbouring Countries: China, Iran, Afghanistan and India

Trade Gateway to: Central Asian Republics: Tajikistan, Turkmenistan, Uzbekistan, Kyrgyzstan, Kazakhstan

Main Industries: Textiles & Apparel, Food Processing, Leather and Leather products, Sports Goods, Surgical Instruments, Carpets& Rugs, Sugar, Cement and Rice, Pharmaceuticals, Construction, Tourism.

Main Exports: Cotton yarn, Cotton fabrics, Towels, Bed wares, Readymade garments, Rice, Synthetic Textiles, Sports goods, Surgical goods, Leather & Leather products, Carpets & Rugs, Fish & Fish preparations, Engineering goods, Chemicals, Petroleum & Petroleum products and Footwear

Major Imports: Oil and Oil products, Capital goods, New Machinery, Old and used machinery, Raw materials for the industry and consumer goods.

Major Exports to Pakistan: Machinery, Boilers, Iron and Steel, Articles of Iron or Steel Cotton, Cotton, Soy, Pharmaceutical products, Tobacco and Tobacco Products, Ceramic Products and Rubber and Articles thereof.

Major Imports from Pakistan: Cotton (Yarn, Woven, mixed and synthetic fabrics) Home & Kitchen textiles, Cotton T-Shirts & Track suits, Towels, Bathrobes, Manicure & Pedicure sets, Medical & Surgical instruments, Sports

151 How to Export - Pakistan

goods, soccer balls and surgical gloves and instruments

Free Trade Agreements (FTAs): China, Sri Lanka, South Asia Free Trade Agreement (SAFTA), Malaysia and Afghanistan- Pakistan Transit Trade Agreement.

Preferential Trade Agreements (PTAs): Iran, Mauritius & Indonesia

9.2 Important Addresses

9.2.1 Offices and Businesses in Pakistan a) Brazilian Diplomatic and Consular Representations in Pakistan

Embassy of Brazil in Islamabad

Address: F-8/3, Street 72, House 1, Islamabad 44000 Telephone: 0092-51-2287189 Fax: 00-92-51-831-6332 Working Hours: 9:00am to 5:00pm (Monday - Friday) E-mails: Ambassador's office: [email protected] Consular Section: [email protected] Commercial Section: [email protected] Cultural and educational [email protected] sections:

Brazilian Honorary Consulate in Karachi

Honorary Consul: Mr. Omer Jaffer Address: 113-A, Sindhi Muslim Housing Society, Main Shahrah-e- Faisal, P.O. Box 7482, Karachi. Contact Person: Mr. Taha Kausar Telephone: 00-92-21-34556088 Direct: 00-92-21-34550217 Fax: 00-92-21-34555154 E-Mail: [email protected]

Brazilian Honorary Consulate in Lahore

Honorary Consul: Mr. Hasan Mansha Address: 1B, Aziz Avenue, Canal Bank, Gulberg V, Lahore. Telephone: 042-35717090-6 EXt-31268 Fax: 042 35717239 E-mail: [email protected]

152 How to Export - Pakistan

Brazilian Honorary Consulate in Peshawar

Honorary Consul: Mr. Amer Faruque, Address: 1st Floor, Betani Arcade, Jamrud Road, Peshawar. Contact Person: Mr. Nadeem-ud-Din Telephone: 00-92-91-5842792 / 5841373 / 5842272 / 5843232 Fax: 00-92-91-5840447 E-Mail: [email protected]

Official Brazilian Bodies

For information on the market, access, local importers, trade opportunities and to obtain the Ministry of External Relations “Foreign Trade Studies and Document Collection” (“Coleção Estudos e Documentos de Comércio Exterior”):

Trade Information Division: Divisão de Informação Comercial - DIC Ministério das RelaçõesExteriores 70.170-900 Brasília-DF Telephone: (61) 20308932 Email: [email protected]

Support to Brazilian business delegations to Pakistan or to economic and trade missions of Pakistan in Brazil: Trade Promotion Operations Division: Divisão de Operações de Promoção Comercial- DOC Ministério das RelaçõesExteriores 70.170-900 Brasília-DF Telephone: (61) 20308531, 20308532 Email: [email protected]

Obtaining Documents

For company registration, the initial process starts with Securities and Exchange Commission (SECP)74 and for proponents from Brazil, it will also include registration with the Economic Affairs Division (EAD)75.

However, different types of companies or businesses have to go through different processes for their complete legal registration. Different types of business may need detailed registration processes that may also need registration with Government regulatory authorities including Oil & Gas Regulatory Authority (OGRA)76 for companies wishing to start business in oil and gas sector. For businesses in electronic

74 www.secp.gov.pk 75 www.ead.gov.pk 76 www.ogra.org.pk

153 How to Export - Pakistan

media, Pakistan Electronic Media Regulatory Authority (PEMRA)77 is the body that looks after such matters.

The documents requirement for each type of business are diverse and are updated annually. It is therefore important to consult the relevant websites for registration procedures and documentation required. Websites of ministries, SECP and other Government offices are provided in Annex 9.2.

Organizations under the Cabinet Division, Government of Pakistan

1. Capital Development Authority www.cda.gov.pk 2. Civil Aviation Authority www.caapakistan.com.pk 3. Federal Directorate of Education www.fde.gov.pk 4. Human Organ Transplant Authority www.hota.pk 5. Intellectual Property Organization of Pakistan www.ipo.gov.pk 6. Global Change Impact Studies Center www.gcisc.org.pk 7. National Archives of Pakistan www.nap.gov.pk 8. National Disaster Management Authority www.ndma.gov.pk 9. National Institute of Disaster Management www.nidm.edu.pk 10. National Electric Power Regulatory Authority www.nepra.org.pk 11. National Institute of Science and Technical Education www.niste.edu.pk 12. Oil and Gas Regulatory Authority www.ogra.org.pk 13. Pakistan Environmental Protection Agency www.environment.gov.pk 14. Pakistan Telecommunication Authority www.pta.gov.pk 15. Pakistan Tourism Development Corporation www.tourism.gov.pk 16. Private Educational Institution Regulatory Authority www.peira.gov.pk 17. Public Procurement Regulatory Authority www.ppra.org.pk

Organizations under the Ministry of Commerce and Textile Industry, Government of Pakistan

1. Directorate General of Trade Organizations www.dgto.gov.pk 2. National Tariff Commission www.ntc.gov.pk 3. National Textile University www.ntu.edu.pk 4. Pakistan Horticulture Development and Export Company www.phdec.org.pk 5. Pakistan Institute of Fashion and Design www.pifd.edu.pk 6. Pakistan Institute of Trade and Development www.pitad.org.pk 7. State Life Insurance Corporation of Pakistan www.statelife.com.pk 8. Trade Development Authority of Pakistan www.tdap.gov.pk 9. Trading Corporation of Pakistan www.tcp.gov.pk

77 www.pemra.gov.pk

154 How to Export - Pakistan

Contact Details of the Federation of Pakistan Chambers of Commerce and Industry Offices

Karachi Islamabad Address: Federation House, Main Address: G-8/1, Aiwan-e-Sanat-o-Tijarat Clifton, Karachi, Pakistan Road, Mauve Area, Islamabad Phone: 021-35873691-94 Phone: 051- 2251891-3, 2289303 Fax: 021-35874332 Fax: 051- 2251894 Email: [email protected] Email: [email protected] Lahore Peshawar Address: 50-A, Tufail Road, Lahore Address: Suite No. 9 & 10, 2nd Floor, Cantt. Azam Tower, University Road, Peshawar Phone: 042-36670970-71 Phone: 091-5704291-2 Fax: 042-36670972 Fax: 091-5846259 Email: [email protected] Email: [email protected] Quetta [email protected] Website: www.fpcci.org.pk

Organizations under the Ministry of Communications, Government of Pakistan

 National Highway Authority www.nha.gov.pk/en  National Highways and Motorway Police www.nhmp.gov.pk  National Transport Research Centre www.ntrc.gov.pk  Pakistan Post www.pakpost.gov.pk

Organizations under the Ministry of Defence, Government of Pakistan

 National Defence University www.ndu.edu.pk  Institute for Strategic Studies, Research and Analysis www.ndu.edu.pk/issra  Frontier Works Organisation www.fwo.com.pk  Pakistan Naval Academy www.paknavy.gov.pk

Organizations under the Ministry of Defence Production, Government of Pakistan

 Armament Research and Development Establishment www.modp.gov.pk/modp/userfiles1/file/ARDE%20web%20data.pdf  Defence Export Promotion Organization www.depo.gov.pk  Directorate General of Defence Purchase www.dgdp.gov.pk/index1.php  Directorate General of Munitions Productionwww.dgdp.gov.pk/index1.php  Heavy Industries Taxila www.hit.gov.pk  Institute of Optronics www.modp.gov.pk/modp  Karachi Shipyard and Engineering Works www.karachishipyard.com.pk  Khan Research Laboratories www.nti.org/learn/facilities/636

155 How to Export - Pakistan

 Military Vehicles Research and Development Establishment www.modp.gov.pk/frmDetails.aspx?opt=misclinks&id=6  National Engineering & Scientific Commission www.nti.org/learn/facilities/586  Air Weapons Complex www.nti.org/learn/facilities/635  National Development Complex www.nti.org/learn/facilities/634  Pakistan Aeronautical Complex www.pac.org.pk  Pakistan Ordnance Factories www.pof.gov.pk

Organizations under the Ministry of Finance, Revenue, Economic Affairs, Statistics and Privatization, Government of Pakistan

 Federal Board of Revenue www.fbr.gov.pk  Pakistan Bureau of Statistics www.pbs.gov.pk  Privatization Commission of Pakistan http://www.pc.gov.pk

Organizations under the Ministry of Foreign Affairs, Government of Pakistan

 Strategic Export Control Division www.mofa.gov.pk/secdiv

Organizations under the Ministry of Industries and Production, Government of Pakistan

 Export Processing Zone Authority www.epza.gov.pk  National Productivity Organization www.npo.gov.pk  Pakistan Gems and Jewellery Development Company www.pgjdc.org  Pakistan Industrial Development  Corporation www.pidc.com.pk  Pakistan Industrial Technical Assistance Centre www.pitac.gov.pk  Pakistan Steel Mills www.paksteel.com.pk  Small and Medium Enterprises Development Authority www.smeda.org  Utility Stores Corporation www.usc.org.pk

Organizations under the Ministry of Information Technology and Telecommunication, Government of Pakistan

 National Information Technology Board www.nitb.gov.pk  National Telecommunication Corporation www.ntc.net.pk  Pakistan Software Export Board www.pseb.org.pk  Pakistan Telecommunications Company Limited www.ptcl.com.pk  Special Communications Organization www.sco.gov.pk

156 How to Export - Pakistan

Organizations under the Ministry of Information, Broadcasting and National Heritage, Government of Pakistan

 Associated Press of Pakistan www.app.com.pk  Institute of Regional Studies www.iPKR.org.pk  National Institute of Folk and Traditional Heritage www.lokvirsa.org.pk  National Language Promotion Department www.nlpd.gov.pk  Pakistan Broadcasting Corporation www.pba.org.pk  Pakistan Electronic Media Regulatory Authority www.pemra.gov.pk  Pakistan National Council of the Arts www.pnca.org.pk  Pakistan Television Corporation www.ptv.com.pk  Press Council of Pakistan www.presscouncil.org.pk

Organizations under the Ministry of National Food Security and Research, Government of Pakistan

 Animal Quarantine Department www.mnfsr.gov.pk  Department of Plant Protection www.plantprotection.gov.pk  Fisheries Development Board www.fdb.org.pk  Livestock and Dairy Development Board www.lddb.org.pk  National Veterinary Lab www.mnfsr.gov.pk  Pakistan Agricultural Research Council www.parc.gov.pk  Pakistan Agricultural Storage and Services Corporation www.passco.gov.pk  Pakistan Oilseed Development Board www.podb-pakistan-oilseed-development-board.pakbd.com

Organizations under the Ministry of National Health Services Regulation and Coordination, Government of Pakistan

 Drug Regulatory Authority of Pakistan www.dra.gov.pk  National Institute of Health www.nih.org.pk  National Institute of Population Studies www.nips.org.pk  Pakistan Medical and Dental Council www.pmdc.org.pk  Pakistan Health Research Council www.phrc.org.pk  Pharmacy Council of Pakistan www.pharmacycouncil.org.pk

Organizations under the Ministry of Petroleum and Natural Resources, Government of Pakistan

 Geological Survey of Pakistan www.gsp.gov.pk  Oil and Gas Development Company www.ogdcl.com  Pak-Arab Refinery Company www.parco.com.pk  Pakistan Mineral Development Corporation www.pmdc.gov.pk

157 How to Export - Pakistan

 Pakistan Petroleum www.ppl.com.pk  Pakistan State Oil www.psopk.com  Sui Northern Gas Pipelines Limited www.sngpl.com.pk  Sui Southern Gas Company www.ssgc.com.pk

Organizations under the Ministry of Ports and Shipping, Government of Pakistan

 Government Shipping Office www.shippingoffice.gov.pk  Gwadar Port Authority www.gwadarport.gov.pk  Karachi Port Trust www.kpt.gov.pk  Mercantile Marine Department www.mercantilemarine.gov.pk  Pakistan Marine Academy www.marineacademy.edu.pk  Pakistan National Shipping Corporation www.pnsc.com.pk  Port Qasim Authority www.pqa.gov.pk

Organizations under the Ministry of Science and Technology, Government of Pakistan

 Council for Work and Housing Research www.cwhr.gov.pk  National Institute of Electronics www.nie.gov.pk  National Institute of Oceanography www.niopk.gov.pk  National University of Sciences and Technology www.nust.edu.pk  Pakistan Council for Renewable Energy Technologies www.pcret.gov.pk  Pakistan Council of Research in Water Resources www.pcrwr.gov.pk  Pakistan Council for Science and Technology www.pcst.org.pk  National Commission for Science and Technology www.ncst.gov.rw  Pakistan Council of Scientific and Industrial Research www.pcsir.gov.pk  Pakistan Engineering Council www.pec.org.pk  Pakistan National Accreditation Council www.pnac.org.pk  Pakistan Science Foundation www.psf.gov.pk  Pakistan Museum of Natural History www.pmnh.gov.pk  Pakistan Scientific &Technological Information Center www.pastic.gov.pk  Pakistan Standards and Quality Control Authority www.psqca.com.pk

Organizations under the Ministry of Water and Power, Government of Pakistan

1. Alternative Energy Development Board www.aedb.org

158 How to Export - Pakistan

2. National Energy Conservation Centre www.enercon.gov.pk 3. National Engineering Services Pakistan www.nespak.com.pk 4. National Transmission and Despatch Companywww.ntdc.com.pk 5. Private Power and Infrastructure Board www.ppib.gov.pk 6. Water and Power Development Authority www.wapda.gov.pk

9.2.2 Offices and Businesses in Brazil

Pakistani Diplomatic and Consular Representations in Brazil

Embassy of Pakistan in Brazil

Address: SHIS QI 15, Conj. 08, Casa-01, Lago Sul, Brasilia-DF CEP: 71.635-280 Telephone: 0055-61- 3364-1632, 0055-61- 3364-1634 Fax: 0055-61- 3248-0246 E-mail: [email protected], [email protected] Website: http://www.mofa.gov.pk/brazil

Commercial Counsellor in São Paulo

Address: Rua James Watt 142, Cj 62, Brooklin Novo, SP, CEP 04576-050 Telephone: 0055-11-5205-1981, 0055-11-5505-4934 E-mail: [email protected] Contact: Mr. Syed IntikhabAlam, Commercial Counsellor Ms. Thais Ribeiro Lobo, Trade Development Officer (TDO)

The Commercial Section in São Paulo is an attached wing of the Embassy of Pakistan in Brasilia. It works in close coordination with the Ministry of Commerce, the Trade Development Authority of Pakistan, the Board of Investment, Chambers of Commerce and Associations in Pakistan and relevant authorities in Brazil. It is responsible for the promotion and the facilitation of Pakistani Exports, including investments in Pakistan.

The Commercial Section in São Paulo is accredited to Brazil, Bolivia, Colombia, Guyana, Suriname and Venezuela.

The Commercial team’s primary responsibility is to connect Brazilian and Pakistani businesses and to provide information on trade activities aiming at mutual business benefits.

The Commercial Section also offers matchmaking services for prospective importers and investors. It is responsible for providing up-to-date trade, investment and tariff policies of Pakistan.

159 How to Export - Pakistan

9.3 Chambers of Commerce

Pakistan:

The Federation of Pakistan Chambers of Commerce & Industry (FPCCI)

In addition to the FPCCI’s Head Office located in Karachi, there are representative offices in three provincial capitals i.e., Lahore, Peshawar, and Quetta and a capital office in Islamabad. There are Chambers of Commerce and Industry in all the major cities of the country. The prominent ones are listed below:

1. Karachi Chamber of Commerce & Industry www.kcci.com.pk 2. Hyderabad Chamber of Commerce & Industry www.hydcci.com/Index.aspx 3. Lahore Chamber of Commerce & Industry www.lcci.com.pk 4. Peshawar Chamber of Commerce & Industry www.kpcci.org.pk 5. Islamabad Chamber of Commerce & Industry www.icci.com.pk 6. Quetta Chamber of Commerce & Industry www.qcci.com.pk 7. Sialkot Chamber of Commerce & Industry www.scci.com.pk 8. Faisalabad Chamber of Commerce & Industry www.fcci.com.pk 9. Multan Chamber of Commerce & Industry www.mcci.org.pk 10. Azad Jammu & Kashmir Chamber of Commerce www.ajkcci.pk

Brazil:

Brazil-Pakistan Chamber of Commerce & Industry (BPCCI)

Address: Av. Montemagno, 2676, CEP 03371-000, São Paulo - SP - Brazil Telephone: 0055-11-3181-5511 Email: info@ brazilpakistan.org Website: www.brazilpakistan.org

9.4 Key Local Trade Associations

A complete list of all trade organizations is available at www.dgto.gov.pk/wp-content/uploads/2017/07/list-of-TOS-2017-18.pdf

1. Pakistan Art Silk Fabrics & Garments Exporters Association, Lahore www.pasfgea.org 2. Pakistan Automobile Spare Parts Importers & Dealers Association [email protected] 3. Pakistan Bed-wear Exporters Association www.pbea.org 4. Pakistan Carpet Manufacturers & Exporters Association [email protected] 5. Pakistan Chemical & Dyes Merchants Association, Karachi www.pcdma.com.pk

160 How to Export - Pakistan

6. Cigarette Manufacturers Association of Pakistan, Karachi 7. All Pakistan Cloth Exporters Association, Faisalabad [email protected] 8. Pakistan Commercial Exporters Of Towels Association, Karachi www.towelword.com 9. Karachi Cotton Association, Karachi [email protected] 10. Pakistan Cotton Fashion Apparel Manufacturers & Exporters Association, Karachi [email protected] 11. Pakistan Cotton Ginners Association, Karachi [email protected] 12. Pakistan Gloves Manufacturers & Exporters Association, Sialkot [email protected] 13. Pakistan Handicraft Manufacturers & Exporters Association, Karachi www.pakistanhandicraftsmanufacturersexp.enic.pk 14. Pakistan Hardware Merchants Association, Karachi www.phma.net 15. Pakistan Industrial Fasteners Manufacturers Association [email protected] 16. Insurance Association of Pakistan, Karachi [email protected] 17. Pakistan Iron & Steel Merchants Association, Karachi 18. Pakistan Jute Mills Association, Karachi [email protected] 19. Pakistan Paint Manufacturers Association, Karachi 20. Pakistan Ship-owners Association, Karachi www.psaa.org.pk 21. Pakistan Silk & Rayon Mills Association, Karachi [email protected] 22. Pakistan Steel Melters Association, Lahore [email protected] 23. Pakistan Steel Re-rolling Mills Association, Lahore 24. Pakistan Sugar Mills Association, Islamabad [email protected] 25. Surgical Instrument Manufacturers 26. Association of Pakistan, Sialkot [email protected] 27. Pakistan Tanners Association, Karachi [email protected] 28. All Pakistan Textile Mills Association, Karachi www.aptma.org.pk 29. Towel Manufacturers Association of Pakistan, Karachi www.towelassociatio.com 30. Pakistan Vanaspati Manufacturers Association, Islamabad www.pvma.com.pk 31. Pakistan Woolen Mills Association, Lahore www.lcci.org.pk/pwma 32. Pakistan Yarn Merchants Association, Karachi [email protected] 33. Pakistan Sports Goods Manufacturers & 34. Exporters Association, Sialkot [email protected] 35. Pakistan Readymade Garments Manufacturers & Exporters Association, Karachi [email protected] 36. Pakistan Electrical Manufacturers Association,

161 How to Export - Pakistan

Lahore, 37. Pakistan Shipping Agents Association, Karachi, www.shipezee.com/psaa 38. Pakistan Advertising Association, Karachi [email protected] 39. Pakistan Agricultural Machinery & Implements Manufacturers Association, Peshawar 40. Pakistan Agricultural Pesticides Association, Karachi www.pakistan-agricultural-pesticides-association-139736.pakbd.com 41. Pakistan Arms & Ammunition Merchants & Manufacturers Association, Lahore www.apadma.org.pk 42. All Pakistan Bedsheets& Upholstery Manufacturers Association, Multan [email protected] 43. Pakistan Beverages Manufacturers Association, Lahore 44. Association of Builders & Developers, Karachi [email protected] 45. Pakistan Canvas & Tent Manufacturers & Exporters Association, Lahore [email protected] 46. Pakistan Chemists & Druggists Association, Karachi www.pcdapak.com 47. Pakistan Cloth Merchants Association, [email protected] 48. All Pakistan Commercial Exporters Association of Rough & Unpolished Precious & Semi-precious Stones, Peshawar [email protected] 49. All Pakistan Cotton Power Looms Association, Faisalabad [email protected] 50. Pakistan Cutlery & Stainless Utensils Manufacturers & Exporters Association, Wazirabad http://pakistan-cutlery-stainless-utensils-manufact-139809.pakbd.com/about_us 51. Pakistan Dairy Association, Lahore [email protected] 52. Deep Sea Fishing Trawlers Operations Association, Karachi www.trade-seafood.com/directory/seafood/fishermen/ 53. Pakistan Dry Battery Manufacturers Association, Karachi [email protected] 54. Pakistan Electrical & Electronics Merchants Association, Karachi [email protected] 55. Pakistan Electric Fans Manufacturers Association, Gujrat [email protected] 56. Pakistan Electronic Manufacturers Association, Karachi 57. Engineering Components & Machinery Manufacturers Association of Pakistan, Lahore [email protected] 58. Pakistan Flour Mills Association, Lahore www.thepfma.com 59. Pakistan Footwear Manufacturers Association, Lahore www.pakfootwear.org 60. All Pakistan Fruit & Vegetable Exporters, Importers & Merchants Association, Karachi www.pfva.net

162 How to Export - Pakistan

61. All Pakistan Gem Merchants &Jewellers Association, Karachi www.apgmja.org 62. All Pakistan Glass Manufacturers Association, Islamabad 63. Pakistan Hotels Association, Karachi www.pha.org.pk 64. Indenters Association of Pakistan, Karachi www.iaop.pk 65. Pakistan Knitwear & Sweaters Exporters Association, Karachi www.paksa.com.pk 66. All Pakistan Marble Industries Association, Islamabad www.apmia.org.pk 67. Pakistan Match Manufacturers Association, Peshawar www.psqca.com.pk/trade.html 68. Pakistan Metal Containers Manufacturers Association, Karachi. 69. Pakistan Pulp Paper & Board Mills Association, Karachi www.pakistanpulppaperboardmillsassociat.enic.pk 70. Pakistan Sanitary Merchants & Manufacturers Association, Karachi 71. Pakistan Seafood Industries Association, [email protected] 72. Pakistan Ship Breakers’ Association, Karachi www.pakistanshipbreakersassociation.enic.pk 73. Pakistan Small Industries Association, Karachi [email protected] 74. Pakistan Small Units Power looms Association, Faisalabad [email protected] 75. Pakistan Soap Manufacturers Association, Karachi www.psma.com.pk/members 76. Pakistan Stationers Association, Karachi [email protected] 77. Pakistan Tea Association, Karachiwww.soflite.com/pta, [email protected] 78. All Pakistan Textile Processing Mills Association, Faisalabad [email protected] 79. Travel Agents Association of Pakistan, Karachi [email protected] 80. All Pakistan Tyres Importers & Dealers Association, Karachi www.ptida.org 81. Pakistan Waste Products Association, Karachi www.pwpa.com.pk 82. Pakistan Wool & Hair Exporters Association, Karachi [email protected] 83. All Pakistan Oil Tankers Owners Association, Karachi [email protected] 84. All Pakistan Particle Boards Manufacturers Association, Karachi www.appma.com 85. All Pakistan Petroleum Cartage & Traders Association, Islamabad www.ppl.com.pk 86. Pakistan Pharmaceutical Importers Association, Karachi www.ppia.info 87. Pakistan Pharmaceutical Manufacturers Association, Karachi www.ppma.or

163 How to Export - Pakistan

88. Pakistan Plastic Manufacturers Association, Karachi www.pakplas.com.pk 89. Pakistan Poultry Association, Karachi www.pakistanpoultrycentral.com 90. All Pakistan Cement Manufacturers Association, Karachi www.apcma.c 91. Pakistan Automobile Importers & Dealers Association, Karachi [email protected] 92. All Pakistan Paper Merchants Association www.appma.com.pk 93. Air Cargo Agents Association of Pakistan www.acaap.org/main.php 94. Pakistan Polypropylene Woven Sack Manufacturers Association, Karachi 95. All Pakistan Cables & Conductors Manufacturers Association, Karachi [email protected] 96. Pakistan Petroleum Exploration & Production Companies Association, Islamabad [email protected] 97. Leasing Association of Pakistan, Karachi [email protected] 98. Pakistan Automotive Manufacturers Association, Karachi [email protected] 99. All Pakistan Contractors Association, Lahore [email protected] 100. Rice Exporters Association of Pakistan, Lahore [email protected] 101. Pakistan Association Of Automotive Parts & Accessories Manufacturers, Lahore [email protected] 102. All Pakistan PVC Pipe Manufacturers Association, Lahore [email protected] 103. All Pakistan Shipping Association, Karachi [email protected] 104. All Pakistan Handloom & Traditional Textile Manufacturers & Exporters Association, [email protected] 105. Pakistan Leather Garments Manufacturers & Exporters Association, Karachi [email protected] 106. Pakistan Hosiery Manufacturers Association, Karachi [email protected], www.phmaonline.com

9.5 E-Commerce Firms

1. OLX Pakistan www.OLX.com.pk 2. Daraz www.daraz.pk 3. PakWheels www.pakwheels.com 4. Zameen www.zameen.com 5. Kaymu www.kaymu.pk 6. Shop Hive www.shophive.com 7. Home Shopping www.homeshopping.pk 8. Jovago www.jovago.com 9. Yayvo www.yayvo.com 10. Symbios www.symbios.pk

164 How to Export - Pakistan

9.6 Consumer Rights Commission of Pakistan (CRCP)

Mailing Address: P.O. Box 1379 Islamabad, Pakistan Telephone: 0092-51-111-739-739 Fax: 0092-51-2825336 Website: www.crcp.org.pk

9.7 Principal Public Banks

1. State Bank of Pakistan www.sbp.org.pk/index.asp 2. National Bank of Pakistan www.nbp.com.pk 3. The Bank of Punjab www.bop.com.pk 4. Sindh Bank www.sindhbankltd.com 5. Bank of Khyber www.bok.com.pk 6. First Women Bank www.fwbl.com.pk

Specialized Banks

1. Industrial Development Bank www.idbl.com.pk 2. SME Bank www.smebank.org 3. The Punjab Provincial Cooperative Bank www.ppcbl.com.pk 4. ZaraiTaraqiati Bank Limited www.ztbl.com.pk

Private Commercial Banks

1. Askari Bank www.akbl.com 2. Allied Bank Limited www.abl.com 3. MCB Bank Limited www.mcb.com.pk 4. Bank Alfalah www.bankalfalah.com 5. Bank Al Habib www.bankalhabib.com 6. Faysal Bank www.faysalbank.com 7. HBL Pakistan www.hbl.com 8. Habib Metropolitan Bank www.habibmetro.com 9. JS Bank www.jsbl.com 10. Samba Bank Limited www.samba.com.pk 11. Silk Bank Limited www.silkbank.com.pk 12. Soneri Bank www.soneribank.com 13. Summit Bank www.summitbank.com.pk 14. United Bank Limited www.ubldirect.com

Islamic Banks

1. Meezan Bank Limited www.meezanbank.com 2. Dubai Islamic Bank www.dibpak.com 3. Al-Baraka Bank www.albaraka.com.pk

165 How to Export - Pakistan

4. Bank Alfalah Islamic www.bankalfalah.com/islamicpk 5. BankIslami Pakistan Limited www.bankislami.com.pk 6. Saadiq Standard Chartered Bank www.sc.com/pk/saadiq 7. Askari Bank Ltd www.akbl.com.pk/branch-type/islamic 8. MCB Islamic Baking www.mcbislamicbank.com 9. UBL Islamic Banking www.ubldirect.com 10. HBL Islamic Banking www.hbl.com/islamicbanking 11. National Bank of Pakistan www.nbp.com.pk/Islamic/index.aspx

Foreign Commercial Banks

1. Deutsche Bank AG https://www.db.com/mea/en/content/Pakistan.htm?kid=pakistan.redirect.subpage 2. Industrial and Commercial Bank of China Limited www.icbc-ltd.com 3. Standard Chartered Pakistan www.sc.com/pk

Micro-finance Banks

1. Advans Micro Finance Bank Limited. www.advanspakistan.com 2. APNA Micro Finance Bank Limited. www.apnabank.com.pk 3. FINCA Micro Finance Bank Limited. www.finca.pk 4. Khushhali Micro Finance Bank Limited. www.khushhalibankcom.pk 5. Mobilink Microfinance Bank Limited. www.mobilinkbank.com 6. NRSP Micro Finance Bank Limited. www.nrspbank.com 7. Pak Oman Micro Finance Bank Limited. www.pomicro.com 8. Sindh Micro-Finance Bank Limited www.sindhmfb.com 9. Telenor Micro Finance Bank Limited. www.telenorbank.com 10. The First Micro Finance Bank Limited. www.fmfb.com.pk 11. U Micro Finance Bank Limited. www.ubank.com

9.8 Media

Leading Newspapers

English Newspapers

1. Dawn www.dawn.com 2. The Nation www.nation.com.pk 3. The News International www.thenews.com.pk 4. Daily Times www.dailytimes.com.pk

166 How to Export - Pakistan

5. The Express Tribune www.tribune.com.pk/epaper 6. Business Recorder www.brecorder.com 7. The Frontier Post www.thefrontierpost.com 8. The Friday Times www.thefridaytimes.com 9. Pakistan Today www.pakistantoday.com.pk

Urdu Newspapers

1. Jang 2. Nawai-e-Waqt 3. Khabrain 4. The Daily Express 5. Daily Pakistan 6. Daily Mashriq 7. Waqt News 8. Daily Aaj

Primary Magazines

All these magazines have name websites with full details.

1. Fashion Central, Lahore 2. Herald, Karachi (Dawn Group of Newspapers) 3. Humsay (Hum Network Limited) 4. IBEX (Business magazine) 5. Libas (Fashion magazine), Karachi 6. MAG, Karachi, (The News Group) 7. Medisearch, Karachi 8. Mobile World, Karachi 9. Mechzine, Lahore 10. Newsline, Karachi 11. Pakistan & Gulf Economist, Karachi 12. Pakistan Textile Journal, monthly textile magazine, Karachi 13. Shugoofa, Hyderabad 14. Spider, Karachi, (Dawn Group of Newspapers) 15. She Magazine (Fashion magazine), Lahore

TV Channels

All these channels have websites with full details.

Entertainment Aaj Entertainment ARY Digital ARY Zindagi ATV A-Plus Express Dhoom TV DM Digital Entertainment Entertainment Dunya Filmazia Hope TV Geo Kahani

167 How to Export - Pakistan

Entertainment Entertainment Geo Entertainment PTV Home Hum Sitaray Hum TV Indus Vision Urdu 1 See TV SBN TV One Global Religious - Islamic ARY Qtv Hadi TV Haq TV Labbaik TV Madani Channel Mashriq TV Paigham TV Takbeer TV News Channels 92 News HD Aaj News AbbTakk News ARY News BOL News ULTRA Channel 24 Business Plus Capital TV HD (Pakistan) HD Channel 5 City 42 Dawn News Din News HD Dunya News Express News Geo News Geo Tez Jaag TV KTN News Metro One Neo TV HD News One PTV News Royal News Roze News Samaa TV Sindh TV News Such TV Waqt News Sports Channels PTV Sports Geo Super Ten Sports Pakistan Children's Channels Cartoon Network Nickelodeon Animax Pakistan Spacetoon Pakistan Pakistan Pakistan English movies Channels AXN Pakistan WB Channel Filmax HBO Pakistan Pakistan DW Movies DW Classic DW Family AXN Music Channels ARY Music 8XM Jalwa Oxygen Indus Music Health Channels HTV Food Channel Hum Masala Education Channel Raah TV Virtual University Business channel Business Plus

Radio Stations

World Wide Stations (Online)

1. Radio Pakistan www.radio.gov.pk 2. The Twist Radio - www.thetwistradio.com 3. The Online FM Radio www.funmazalive.com 4. The FM Corner www.thefmcorner.com 5. The Twist Radio www.thetwistradio.com 6. Radio Asia Live www.radioasialive.com 7. The Magic Radio www.themagicradio.com 8. Radio Rhythmz www.radiorhythmz.fm

9.9 Main Advertising Agencies

1. BrandLogics www.brandlogics.org

168 How to Export - Pakistan

2. CINETIC www.cinetic.pk 3. Coven Marketing Management www.omarsa.daportfolio.com 4. Bulls Eye Communication www.be.com.pk/index_home.php 5. VivoticSolucion www.vivoticsol.com 6. National Marketing Services www.nms.com.pk 7. The Brand Consultants www.thebrandconsultants.net 8. Genesis Group www.genesisgroup.com.pk 9. Bramerz www.bramerz.pk 10. Ethereal Impressions www.ethereal-impressions.com 11. Competitive Edge Digital Agency www.ce.digital 12. ERD Solutions www.erdsolutions.com 13. Social Lights Now www.socialightsnow.com 14. Digital Tribe www.digitaltribe.co 15. SocioMak www.sociomak.com 16. Opus Communications www.opus.com.pk 17. J. Walter Thompson Pakistan www.jwt.com/en/pakistan 18. Interflow www.interflow.com.pk 19. Time & Space Media (Pvt) Ltd. www.timenspacemedia.com 20. Walnut Media: www.walnut-media.com 21. Evolution Media Network www.evmedianetwork.com 22. Prestige www.prestige.com.pk 23. Rabbit and Carrot www.rabbitandcarrot.com 24. Pirana www.piranagroup.com 25. CMC www.cmc.com.pk 26. Lane Twelve www.lanetwelve.com 27. Channel 7 Communications www.channel7.com.pk 28. Centangle Interactive www.centangle.com 29. Seven Koncepts www.sevenkoncepts.com 30. Bond Advertising www.bondadvertising.com.pk 31. Spectrum Y&R www.spectrumyr.com 32. 4M Designers www.4mdesignePKR.com 33. Enekon www.enekon.com 34. Kinetic Pakistan www.kineticww.com 35. SEOLHR www.seolhr.com 36. DTech System www.dtechsystem.net 37. Digitz www.thedigitz.com 38. WebNet Pakistan www.webnet.com.pk 39. Convex Interactive www.convexinteractive.com 40. Progos Tech www.progostech.com 41. MSS Digital Media Arts www.mssdigital.com 42. Destiny SEO www.destinyseo.com 43. Converge Technologies www.converget.com

169 How to Export - Pakistan

44. Adcom www.adcompk.com 45. MullenLoweRauf www.mullenlowerauf.com 46. Impact BBDO www.impactbbdo.com 47. PACE www.pace.com.pk 48. Publicis www.publicis.com 49. Ravi www.ravipak.com

9.10 Consulting Firms

1. Aon Consulting www.aon.com 2. BearingPoint www.bearingpoint.com 3. Computer Associates www.ca.com 4. Computer Sciences Corporation www.csc.com 5. Deloitte Consulting www2.deloitte.com 6. Ernst & Young www.ey.com 7. Grant Thornton www.grantthornton.com 8. IMS Health www.imshealth.com 9. KPMG Consulting www.home.kpmg.com 10. Manpower www.manpower.com 11. Price Water House Coopers www.pwc.com 12. Unisys Consulting www.unisys.com 13. National Engineering Services Pakistan Ltd www.nespak.com.pk 14. Republic Engineering Corp. Pvt Ltd. www.rec.com.pk 15. Associated Consulting Engrs www.acepakistan.com 16. Osmani & Co (Pvt) Ltd. www.osmani.com 17. International Consultants www.keoic.com 18. Consult Tech. www.consult-tech.com 19. Superior Consulting (Pvt) Ltd. www.superior.com.pk 20. Ahmed Ali Dewan & Co. www.aadewaniplaw.com 21. Baz Consulting www.bazconsulting.com 22. CHIP Training & Consulting Pvt Ltd.www.ctc.org.pk

9.11 Market Research Companies

1. Access Consumetrics (ACPL) www.consumetrics.pk 2. International Field & Tab www.field-tab.com.pk 3. IRF (International Research Force) www.irf.com.pk 4. Market Research Bureaux Pakistan (Pvt)www.mrbglobal.pk 5. Markematics www.markematics.com.pk 6. Ipsos Pakistan www.ipsos.com 7. Iris Communications www.iriscommunications.com.pk 8. Foresight Research www.foresight.com.pk

170 How to Export - Pakistan

9. Gallup Pakistan www.gallup.com.pk 10. Aftab Associates www.aftabassociates.pk 11. SMAR International www.smarinternational.com

9.12 Obtaining Documents

Useful Links for Brazilian Businesses:

1. Government of Pakistan www.pakistan.gov.pk 2. Ministry of Foreign Affairs www.mofa.gov.pk 3. Federal Board of Revenue www.fbr.gov.pk 4. Board of Investment www.boi.gov.pk 5. National Tariff Commission of Pakistanwww.ntc.gov.pk 6. Pakistan Tourism Development Corp www.tourism.gov.pk

9.13 Transportation Companies with Services to Brazil

The Pakistan International Freight Forwarders Association (PIFFA) www.piffapk.com

9.14 Local Freight Forwarding Agents

1. Multiways Freight Services 2. Insta Track (Pvt) Ltd 3. Int'l Logistics Solution 4. Mit Logistics 5. Express Transport Line 6. Ils Courier Service 7. Usama Harris Khan and Company 8. Costa Logistics 9. Balance Logistics & Relocations

9.15 Shipping Lines / Cargo Supervision Firms

1. Aries Logistics (Pvt) Ltd www.arieslogistics.com 2. Al-Hamd International Container Terminal (Pvt) Ltd www.aictpakistan.com 3. Burma Oil Mills Ltd www.bifs.com.pk 4. EMKAY Shipping Line www.cimshipping.com 5. Trans Asia Line (TAL) www.marinepakistan.com 6. Ignazio Messina & Co. www.messinaline.it 7. Marine International Container Terminal www.mict.com.pk 8. Pakistan International Container Terminal Ltdwww.pict.com.pk 9. Transworld Cargo Dispatch Co Ltd www.tcdc-psg.com 10. Pak Shaheen Container Services (Pvt) Ltd www.pscs-psg.com 11. Interocean Cargo Services (Pvt) Ltd www.icspakistan.com.pk 12. Mitsui O.S.K. Pakistan (Pvt) Ltd www.molpower.com

171 How to Export - Pakistan

13. Pak Shaheen Freighters www.psf-psg.com 14. ANL Singapore Pte. Ltd. www.mrgc.com.pk 15. Maersk Line – Safmarine www.maerskline.com.pk 16. OOCL Pakistan Private Limited www.oocl.com 17. APL Pakistan (Pvt) Ltd www.apl.com 18. MSC AgenPakistan (pvt) Limited www.mscpakistan.com 19. Sharaf Shipping Agency (Pvt) Ltd www.sharafshipping.com 20. United Arab Shipping Agency Company Pak (Pvt) Ltd www.uasc.net

9.16 Shipping Supervision and Oversight

Aries Global Logistics (Sea and Road Freight) Address Brazil: RuaConstantino, Marochi, 422 – Cs 02,Curitiba, PR – Brazil, Zip code 80.030-360 Telephone: 0055-41-9600-5621, 0055-41-9894-3246 Email: [email protected]

Aries Logistics (Pvt) Ltd Address Pakistan: 81 – Ali Block, 1st Floor, Garden Town, Lahore, Pakistan Telephone: 0092-42-35889791-4 Fax: 0092-42-3588-9795 E-mail: [email protected], [email protected] Website: www.arieslogistics.com Contact: Mr TouqirLodhi, CEO, 0092-321-4430802

9.17 Operational Flow

Export Destination

172 How to Export - Pakistan

Import Origin

Source: Observatory of Economic Complexity (http://atlas.media.mit.edu/en/visualize/tree_map/hs92/import/pak/show/all/2016/)

9.18 Other Useful Addresses

1. Travel Web www.travel.web.pk 2. Club Alpino www.alpineclub.org.pk 3. Lahore Gymkhana Club www.lahoregymkhana.com.pk 4. Karachi Gymkhana Club www.kg.com.pk 5. Islamabad Club www.islamabadclub.org.pk 6. Cultural Heritage www.heritage.gov.pk 7. Islamabad city portal www.islamabad.net 8. Karachi city portal www.karachicity.gov.pk 9. Lahore City Portal www.lahore.gov.pk 10. Music of Pakistan www.radio.gov.pk 11. T.V Pakistan www.ptv.com.pk 12. Pakistan International Airlines www.piac.com.pk 13. Shaheen International Airlines www.shaheenair.com 14. Air Blue International Airlines www.airblue.com 15. Pearl Continental Hotels www.pchotel.com 16. Serena Hotels www.serenahotels.com 17. Marriott Hotels www.marriott.com 18. Hotel Avari www.avari.com 19. Hotel One www.hotelone.com.pk 20. The Nishat Hotels www.nishathotels.com 21. Shalimar Tower Hotel www.shalimartowerhotel.com

173 How to Export - Pakistan

9.19 Maps, Figures and Charts

Ecological Regions of Pakistan

Map of Pakistani Airports

174 How to Export - Pakistan

9.20 HDI Classification by District

Estimated Human Development Indices for Districts of Pakistan Punjab Sindh Khyber Pakhtunkhwa Balochistan Low Level HD Low Level HD Low Level HD Low Level HD Rajanpur 0.425 Kashmore 0.343 Tor Ghar 0.323 Dera Bugti 0.297 Muzaffargarh 0.427 Tando M. Khan 0.361 Kohistan 0.330 Jhal Magsi 0.330 Rahim Yar Khan 0.440 Jacobabad 0.369 upper Dir 0.366 Killa Abdullah 0.332 D.G. Khan 0.445 Ghotki 0.371 Buner 0.388 Chagai 0.332 Bahawalpur 0.465 Tharparkar 0.372 Batagram 0.412 Nasirabad 0.336 Lodhran 0.462 Umer kot 0.385 Shangla 0.416 Sheerani 0.338 Bhakkar 0.475 Shahdadkot 0.386 Tank 0.423 Harnai 0.350 Bahawalnagar 0.478 Tando Allah Yar 0.388 Hangu 0.425 Barkhan 0.356 Khanewal 0.491 Badin 0.395 D. I. Khan 0.442 Kohlu 0.360 Chiniot 0.499 Sujawal 0.408 Swabi 0.447 Bolan/Kachhi 0.360 Jhang 0.505 Shikarpur 0.412 Swat 0.450 Jaffarabad 0.361 Pakpattan 0.505 Khairpur 0.412 Charsadda 0.469 Washuk 0.372 Vehari 0.507 Thatta 0.422 Lakki Marwat 0.469 Killa Saifullah 0.378 Mianwali 0.511 Jamshore 0.439 Lower Dir 0.471 Ziarat 0.388 Multan 0.515 Mirpur Khas 0.440 Kohat 0.475 Awaran 0.388 Okara 0.517 matiari 0.442 Nowshera 0.483 Kharan 0.392 Khushab 0.530 Sanghar 0.446 Mardan 0.484 Musakhel 0.400 Kasur 0.545 Benazir Abad 0.463 Bannu 0.492 Khuzdar 0.400 Sargodha 0.548 Larkana 0.478 Karak 0.495 Nushki 0.402 Layyag 0.549 Sukkur 0.478 Mansehra 0.506 Zhob 0.403 Medium Level HD Naushahro Feroze 0.511 Malakand 0.515 Sibbi 0.413 Faisalabad 0.554 Hyderabad 0.513 Chitral 0.529 Lasbela 0.415 Sahiwal 0.554 Dadu 0.514 Peshawar 0.534 Pishin 0.416 Hafizabad 0.555 Medium Level HD Medium Level HD Loralai 0.425 Narowal 0.562 Karachi 0.654 Abbottabad 0.573 Kalat 0.432 T.T. Singh 0.563 Haripur 0.573 Mastung 0.443 Attock 0.576 Gwadar 0.492 mandi Bahauddin 0.590 Quetta 0.496 Sheikhupura 0.590 Chakwal 0.591 Gujranwala 0.604 nankana Sahib 0.613 Jhelum 0.627 Gujrat 0.628 Sialkot 0.635 Rawalpindi 0.646 Lahore 0.670 Source:Source: Estimates Estimates are are based basod on PSLM, on PSLM, 2014 2014-15-15 data data.

175 How to Export - Pakistan

Annual increase of Brazilian share in world exports between 2012-2016, %

Annual increase of Brazilian share in world exports between 2012-2016, %

176 How to Export - Pakistan

Annual increase of Brazilian share in world exports between 2012-2016, %

Annual increase of Brazilian share in world exports between 2012-2016, %

177 How to Export - Pakistan

Annual increase of Brazilian share in world exports between 2012-2016, %

Annual increase of Brazilian share in world exports between 2012-2016, %

178 How to Export - Pakistan

Annual increase of Brazilian share in world exports between 2012-2016, %

Annual increase of Brazilian share in world exports between 2012-2016, %

179 How to Export - Pakistan

Annual increase of Brazilian share in world exports between 2012-2016, %

9.21 Major Traffic Flow by Airports between July 2015 - June 2016

Domestic International Total Total Aircraft Movement (number) 71,227 85,987 157,214 Total Passenger Movement (number) 6,937,304 12,703,951 19,641,255 Total Cargo Movement (M. Tonnes) 37,694 300,772 338,467 Total Mail (M. Tonnes) 203 13,679 13,882

List of Airlines Operating In Pakistan

Domestic Airlines

1. Air Blue Ltd. 2. Pakistan International Airlines 3. Shaheen Air International

International Airlines

1. Air Arabia 2. Air Blue Ltd 3. Air China 4. China Southern Airlines 5. Emirates Airlines 6. Etihad Airlines 7. Fly Dubai 8. Gulf Air 9. Iran Air 10. Kuwait Airways

180 How to Export - Pakistan

11. Malindo Air 12. Oman Air 13. Pakistan International Airlines 14. Qatar Airways Company 15. Safi Airways 16. Saudi Arabian Airlines 17. Shaheen Air International 18. Srilankan Airlines Ltd 19. Thai Airways International Ltd 20. Turkish Airlines

The flight distance from Pakistan to Brazil is: 8,654 miles / 13 927 km and the direct flight time is 14 hours from Dubai or Doha to São Paulo.

Airlines that fly to Brazil

 Emirates  Air China  Qatar Airways  Turkish Airlines

9.22 Additional Information

Currency and subdivisions The Pakistani Rupee (PKR) is the currency and one Rupee comprises 100 paisas Coin and paper currency notes Current coins in circulation have the following denominations;  PKR 5  PKR 10 Current currency notes in circulation are have the following denominations:

 PKR 10  PKR 20  PKR 50  PKR 100  PKR 500  PKR 1000  PKR 5000 Exchange rate to US dollar at the 1 US Dollar to Pakistani Rupee is 105.3 (October end of the last available month 31, 2017) Weights and measures Pakistan uses the metric system for weights and measures. The basic unit of weights is the kilogram. 1 KG=2.2 pounds

181 How to Export - Pakistan

For land measurement, Marla and Kanal is used. 1 Marla = 272 Sq. ft or 250 Sq. ft (differs in different cities) 1 Kanal= 5400 Sq. ft

For length, generally kilometres are used. 1 KM=0.62 Miles

For temperature, Celsius is commonly used. 1 Celsius= 33.8 F

For liquid volumes, litre is generally used. 1 Litre = 0.26 US gallons

Communications Telephone: For landline, Pakistan Telecommunication company (PTCL) is the only service provider.

For Mobile, there are different service providers which include Zong, Ufone, Telenor and Jazz. Outlets are generally available in all large and small cities in nearly all markets for purchasing a connection.

Postal Communication: Pakistan post is the Government owned postal communication company. Other companies include DHL, TCS, OCS, LCS and their outlets are present in nearly all major and small cities of Pakistan.

For communications with Brazil, nearly all telecommunication companies provide International Direct Dialling service (IDD). The rate are PKR 23.4 (0.22 USD) per minute if calling from land line and PKR 35.4 (USD 0.34) per minute if called from mobile. Holidays Main holidays in Pakistan in which Government agencies, commercial establishments and banks are closed for business, include:  Kashmir Day, February 5 (of each year)  Pakistan Day, March 23 (of each year)  Labour Day, May 1 (of each day)  3 days holidays in Eid ul Fitr (varies as it is linked to lunar calendar)

182 How to Export - Pakistan

 3 days holidays on Eid ulAdha (varies as it is linked to lunar calendar)  Independence Day, August 14 (of each year)  9-10 Moharram (varies as it is linked to lunar calendar)  Christmas and Birthday of the Founder of Pakistan, December 25 Time zones Time difference between Brazil and Pakistan

Brasília and Islamabad: 7 hours (8 hours in case of Daylight saving time)

Business hours In Pakistan, the business hours are generally 9 AM to 5 PM. In the private sector, the timing is flexible and can go up to 6 o’clock.

For routine matters in public sector offices, it is advisable to conclude business by 4 PM or before that. Electric power: Voltage(s) and The electricity in Pakistan is 230 Volts, cycle(s) alternating at 50 cycles per second. If you travel to Pakistan with a device that does not accept 230 Volts at 50 Hertz, you will need a voltage converter.

Periods recommended for Generally, major cities are accessible all round travel: based on local customs the year. However, it is advisable to plan and conditions, such as: cautiously during the monsoon season (15 July vacation periods, hotel until August 30) when severe rains often vacancies, climate conditions, hamper travelling. etc. It is also not advisable to travel when Pakistanis are celebrating EidulAdha and EidulFitr. The dates vary as they are linked to the lunar calendar, therefore it is recommended to seek information from internet or from the Embassy of Pakistan in Brasília.

Obtaining a Visa and Customs For citizens of Brazil, a visa can be obtained at the Embassy of Pakistan in Brazil. Generally, an entry visa (or a visit visa) is provided for 30 days. For some particular areas in Pakistan, foreigners may need a No-Objection Certificate (NOC) from the Ministry of Interior, Government of Pakistan, for which it is

183 How to Export - Pakistan

important to discuss the travelling destinations with the staff at the Embassy of Pakistan.

Alcohol is not allowed in the country and hence any alcohol will be confiscated and may lead to other problems.

People having Israeli nationality are not allowed in Pakistan.

Representative list (name, Ramada Hotel, Islamabad: Near Islamabad address, telephone, Web site, Club, Murree Road، Islamabad, Pakistan and e e-mail) of mid to high Phone: +92 51 111 379 379 category hotels in the Capital. Serena Hotel, Islamabad: Khayaban-e- Suhrwardy, Opposite Convention Centre,, Islamabad 44000, Pakistan Phone: +92 51 2874000

Movenpick Hotel, Karachi: Club Road, Karachi 75530, Pakistan Phone: +92 21 35633333

،Pearl Continental Hotel, Karachi: Club Road Karachi, Pakistan Phone: +92 21 111 505 505

Pearl Continental, Lahore: Shara-e-Quaid-e- Azam, Lahore. Tel: 92-42-111 505 505 Fax: 92-42-3636 2698 E-mail: [email protected]

184 How to Export - Pakistan

Bibliography

Agency, W. F. (2017). thedora. From theodora.com: http://www.theodora.com/wfbcurrent/pakistan/pakistan_energy.html

Bank, T. W. (2015). Inflation, Consumer Prices. The World Bank.

Bank, T. W. (2017). World Bank . From World Bank: https://data.worldbank.org/indicator/SI.POV.NAHC?locations=PK

Bank, T. W. (n.d.). Poverty & Equity Data. From povertydata.worldbank.org: http://povertydata.worldbank.org/poverty/home/

Bank, T. W. (n.d.). The World Bank, 2016. From data.worldbank.org: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=PK

Bank, W. (2017). data.worldbank. From World Bank: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=PK

Bank, W. (2017). The World Bank. From data.worldbank: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=PK

Bank, W. (2017). The World Bank. From data.worldbank: https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?locations=PK

Bank, W. (2017). World Bank Data. From data.worldbank: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=PK

Bank, W. (n.d.). World Bank. From worldbank.org: http://www.worldbank.org/

Census, P. (2017). Pakistan Census. Islamabad: Pakistan Bureau of Statistics.

Center, S. P. (2016). Quantifying Sub-National Human Development Indices from Household Survey Data. Karachi: Social Policy and Development Center.

Centres, P. E. (n.d.). Pakistan Expo Centres. From expolahore.com, Pakistan Expo Centres: http://www.expolahore.com/new/

Dawn News, K. K. (2016 йил 30-September). With a New Chinese Loan, CPEC is now Worth $51.5 bn. Dawn News, Kiani, Khaleeq, With a New Chinese Loan, CPEC is now Worth $51.5 bn. Islamabad, Pakistan: Dawn.

Division, F. (2015-16). Highlights Pakistan Economic survey 2015-16. From irispunjab.gov.pk: http://www.irispunjab.gov.pk/Economic%20Surveys- New/Economic%20Survey%202015-16.pdf

185 How to Export - Pakistan

Division, U. N. (2017 йил 1-January). Country Profile. Retrieved 2017 йил 13- September from data.un.org: http://data.un.org/CountryProfile.aspx?crName=PAKISTAN

Economics, T. (2000-2017). Trading Economics, www.tradingeconomics.com. From tradingeconomics.com: https://tradingeconomics.com/pakistan/gold- reserves

Economics, T. (2014-16). Trading Economics. From tradingeconomics.com: https://tradingeconomics.com/pakistan/rating

Economics, T. (n.d.). Trading Economics, www.tradingeconomics.com. From www.tradingeconomics.com: https://tradingeconomics.com/pakistan/unemployment-rate

Finance, M. o. (2016-17). Energy. In M. o. Finance, Pakistan Economic Survey (p. 9). Islamabad: Ministry of Finance.

Finance, M. o. (2016-17). Manufacturing and Mining. In M. o. Finance, Pakistan Economic Survey (p. 29). Islamabad: Ministry of Finance.

Fund, I. M. (2016 йил April). International Monetary Fund. From imf.org: www.imf.org/external/pubs/ft/weo/2016/01/weodata/weorept.aspx?sy=2 012&ey=2017&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=37&pr1.y=7 &c=564&s=PCPI%2CPCPIPCH&grp=0&a=

Fund, I. M. (2016 йил April). International Monetary Fund. From imf.org: http://www.imf.org

Fund, I. M. (2016). World Economic Outlook Database. International Monetary Fund.

Fund, I. M. (n.d.). Fund, International Monetary. Retrieved from imf.org: http://www.imf.org/external/country/PAK/index.htm

Fund, I. M. (n.d.). IMF Data. From imf.org: http://www.imf.org/en/Data

Fund, I. M. (n.d.). International Monetary Fund. Retrieved from imf.org: https://www.imf.org/external/np/fin/tad/query.aspx

Government of Pakistan, M. o. (2016-17). Economic Survey of Pakistan. In M. o. Government of Pakistan, Economic Survey of Pakistan (p. 15). Islamabad: Government of Pakistan.

Industry, I. C. (n.d.). Islamabad Chamber of Commerce and Industry. From icci.com.pk: http://www.icci.com.pk/

186 How to Export - Pakistan

Ministry of Finance, G. o. (2016-17). Pakistan Economic Survey 2016-17. In M. o. Finance, Pakistan Economic Survey 2016-17 (p. 26). Islamabad: Government of Pakistan.

Ministry of Finance, G. o. (n.d.). Ministry of Finance. From finance.gov.pk: http://www.finance.gov.pk/

Pakistan Bureau of Statistics. (n.d.). Retrieved from pbs.gov.pk: http://www.pbs.gov.pk

Pakistan Bureau of Statistics, G. o. (n.d.). Pakistan Bureau of Statistics. From pbs.gov.pk: http://www.pbs.gov.pk

Pakistan Economy Survey. (n.d.). From finance.gov.pk: http://www.finance.gov.pk/

Pakistan, G. o. (n.d.).

Pakistan, K. P. (n.d.). Karachi Port Trust. From kpt.gov.pk: http://kpt.gov.pk/

Pakistan, M. o. (2015-17). Overview of the Economy. In M. o. Finance, Overview of the Economy (p. 15). islamabad: Ministry of Finance.

Pakistan, M. o. (2016-17). Overview of Economics. In M. o. Finance, Pakistan Economic Survey (p. 15). islamabad: Ministry of Finance.

Pakistan, M. o. (n.d.). wapda. From wapda.gov.pk: http://www.wapda.gov.pk

Pakistan, P. Q. (n.d.). Port Qasim Authority. From pqa.gov.pk: http://pqa.gov.pk/

Pakistan, S. B. (1956). State Bank of Pakistan ACT 1956. Islamabad: State Bank of Pakistan.

Pakistan, S. B. (2010-15). Domestic Markets & Monetary Management Department. In S. B. Pakistan, Forex (p. 1). Islamabad: State Bank of Pakistan.

Pakistan, S. B. (2012-2017). Inflation Monitor. Islamabad.

Pakistan, S. B. (2015). Domestic Markets & Monetary Management Department. In S. B. Pakistan, Domestic Markets & Monetary Management Department (p. 1). Islamabad: State Bank of Pakistan.

Pakistan, S. B. (2017). State Bank of Pakistan. From sbp.org.pk: http://www.sbp.org.pk/

Pakistan, S. B. (n.d.). State Bank of Pakistan. From sbp.org.pk: http://www.sbp.org.pk/

187 How to Export - Pakistan

Pakistan, T. D. (n.d.). Trade Development Authority of Pakistan . From tdap.gov.pk: http://www.tdap.gov.pk/karachi-expo-center.php

Railways, P. (n.d.). Pakistan Railways. From pakrail.gov.pk: https://www.pakrail.gov.pk

Resources, M. o. (n.d.). Pakistan Mineral Development Corporation. Pakistan Mineral Development Corporation. Islamabad, Pakistan: Ministry of Petroleum and Natural Resources.

Statistics, P. B. (2013-14). Labour Force Statistics, Pakistan Bureau of Statistics. Islamabad: Pakistan Bureau of Statistics.

Statistics, P. B. (2017). Pakistan Bureau of Statistics. From pbs.gov.pk: http://www.pbs.gov.pk/

Statistics, P. B. (2017). Pakistan Bureau of Statistics. From pbs.gov.pk: http://www.pbs.gov.pk/

Statistics, P. B. (n.d.). Pakistan Bureau of Statistics. From pbs.gov.pk: http://www.pbs.gov.pk/

Statistics, P. B. (n.d.). Pakistan Bureau of Statistics. From pbs.gov.pk: http://www.pbs.gov.pk/

Statistics, P. B. (n.d.). Pakistan Bureau of Statistics. From pbs.gov.pk: http://www.pbs.gov.pk/

The World Bank, Pakistan National Socioeconomic Indicators, 2016. (n.d.). From data.worldbank.org: https://data.worldbank.org/indicator/NE.CON.PRVT.CD?locations=PK

UNDP. (2016). Human Development Report. Islamabad: UNDP.

UNDP. (2016). UNDP. From hdr.undp.org: http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/PAK.pdf

UNESCO. (2017 йил 1-January). world bank. Retrieved 2017 йил 1-January from world bank: https://data.worldbank.org/indicator/SE.ADT.LITR.ZS?locations=PK

188