Pakistan has approved a major incentive allowing Chinese companies operating in the Gwadar Free Zone to retain 50% of their export proceeds in designated foreign currency accounts.
These funds can be used for foreign payments related to current account transactions without prior authorization from the State Bank of Pakistan (SBP).
The SBP has noted that offering long-term facilitation will require amendments to the Gwadar Port Authority Act, aligning it with Export Processing Zone regulations and exempting it from certain provisions of the 1947 Foreign Exchange Regulation Act. This policy shift comes ahead of Prime Minister Shehbaz Sharif’s scheduled visit to China for the Shanghai Cooperation Organisation (SCO) summit in late August.
A committee comprising Planning Minister Ahsan Iqbal, Commerce Minister Jam Kamal Khan, and SAPM Haroon Akhtar has been meeting regularly on this matter. Pakistan’s ambassador to China, Khalil Hashmi, was also consulted and proposed organizing a Business Conference in Tianjin on September 2. However, some officials have raised concerns, pointing out the ineffectiveness of similar past events where over 150 MoUs were signed without resulting in concrete investments.
The committee is also working to resolve long-pending infrastructure challenges in Gwadar. It has instructed the Ministry of Energy to arrange temporary power supply from the Pakistan Navy for the desalination plant and urged the Power Division to speed up grid connectivity for the Rashakai Special Economic Zone.
To attract investment, a sector-specific pitch book is being finalized, focusing on industries such as chemicals, steel, copper, electric vehicles, solar panels, information and communication technology (ICT), and food processing.
Related Posts
