The Federal Government has transferred oversight of cotton export matters from the Trade Development Authority of Pakistan (TDAP) to the State Bank of Pakistan (SBP) in a significant regulatory shift aimed at improving compliance and efficiency in the export sector.
According to S.R.O. 2486(I)/2025, the SBP will now be responsible for monitoring and regulating cotton export transactions. Under the new framework, exporters are required to deposit 1 percent of the total contract value with the State Bank of Pakistan as a security measure. In addition, exporters must obtain a confirmation letter from SBP, which will be presented to customs authorities at the time of shipment clearance.
The notification also makes it mandatory for foreign buyers to open an irrevocable letter of credit (LC) through recognized banking channels. This step is intended to safeguard exporters against payment risks and ensure greater financial discipline in international trade transactions.
Furthermore, the government has imposed a strict timeline for shipment completion. Export consignments must be shipped within 180 days from the date of contract. In cases where exporters fail to meet this deadline, the deposited security amount will be forfeited proportionately, depending on the extent of non-compliance.
Officials say the new measures are designed to streamline export procedures, enhance transparency, and ensure timely fulfillment of export contracts. By bringing cotton exports under the direct supervision of the central bank, the government aims to reduce delays, discourage speculative contracts, and strengthen Pakistan’s credibility in the global cotton market.
Industry stakeholders are expected to closely review the new requirements, as the policy marks a notable change in the regulatory landscape for one of the country’s key export commodities.
