Pakistan's commerce ministry has authorised the release of Rs10 billion in long-pending export refunds, a move aimed at easing cash-flow strains for textile and non-textile exporters. The payment, sanctioned under the Duty Drawback and Technology Upgradation Schemes, comes as export receipts for FY26 missed targets amid the Middle East conflict and rising production costs. Main Developments The bulk of the disbursed amount targets the textile sector, with Rs4.35bn allocated under the Textile Upgradation Fund (TUF) for 2009-14 and Rs4.18bn under the Duty Drawback of Taxes (DDT) for 201,821 claims. Smaller textile-related payments include Rs1.77m under the Duty Drawback of Local Taxes and Levies (DLTL) Order 2009-12 and Rs231.87m under the DDT Order 2017-18. Non-textile industries also received a share, with Rs1.09bn under the Local Taxes and Levies Drawback (LTLD) Order 2018 and Rs127.79m under LTLD Order 2017. These reimbursements cover sectors like leather, sports goods, and surgical instruments, which rely on the LTLD mechanism to offset local taxes and levies that undermine their global competitiveness. Read also: Wheat Flour Prices Surge as Pakistan Delays Import Tender Despite the substantial payout, Rs1.94bn in outstanding claims remains unsettled. Commerce Minister Jam Kamal Khan said the sanctioned funds are expected to improve industrial liquidity and enable exporters to enhance their competitiveness and expand in international markets. Background The refunds stem from trade policies dating back to 2009, including the TUF scheme designed to support textile technology upgradation. Over the years, these dues accumulated, tying up exporters' working capital and complicating their ability to compete globally. The LTLD mechanism was introduced specifically to encourage export diversification beyond textiles by reimbursing local taxes for non-textile value-added industries. Pakistan Textile Exporters Association Patron-in-Chief Khurram Mukhtar welcomed the release, crediting authorities for liquidating such old refunds in one go. He noted, however, that only a comprehensive clearance of all dues would fully stabilise manufacturers' cash flows. Why It Matters The timing is critical: export proceeds are declining, and the textile sector faces surging production costs due to the Middle East conflict. For smaller exporters, particularly in non-textile sectors, timely reimbursements are essential to sustain operations. Clearing decade-old claims eases working capital pressures, helping exporters regain footing in global markets and supporting the country's export diversification goals. What's Next Mukhtar has urged the government to release the remaining Rs1.94bn as a supplementary grant to fully settle exporters' dues. The commerce ministry has not yet indicated a timeline for clearing the balance, but the move signals a potential shift toward faster refund processing. Exporters will be watching for further disbursements and any policy adjustments to prevent future backlogs.