Govt decides to do away with R&D support

The Government has decided in principle to gradually convert Research and Development (R&D) support into export-oriented units (EOUs) promotion scheme for increasing investment and enhancing exports. The proposed Textile Industry Development Policy 2007 has this option in it to benefit other potential new industries to grow and secure their shares in the export markets. The Ministry of Textile Industry and Federal Board of Revenue (FBR) are finalising the modalities of the EOUs promotion scheme, which would be announced in near future.

The authorities at FBR have already endorsed this idea and have conveyed to the Textile Ministry that they have no objection of converting R&D support into EOUs promotion scheme for increasing investment and enhancing exports.

New sectors which have the potential to grow and can earn valuable foreign exchange for the country would be allowed the benefits of the EOU schemes.

In the textile sector R&D support would eliminated from those sectors which are contributing less and it would be shifted towards those sectors which are value-addition driven and can increase contribution in exports.

To encourage investment and facilitate exports, it has been decided to introduce a scheme of EOUs. The scheme will essentially have the same incentives as are available to units in the EPZs. Existing units exporting at least 80% of their production shall be eligible for registration (with FBR) under the scheme.