The Federal Government has shifted the responsibility for regulating cotton exports from the Trade Development Authority of Pakistan (TDAP) to the State Bank of Pakistan (SBP). The decision has been formally notified through S.R.O. 2486(I)/2025, issued by the Ministry of Commerce.
According to the notification, the changes have been made under the powers granted by Section 3(1) of the Imports and Exports (Control) Act, 1950.
These amendments update the Export Policy Order, 2022, with the aim of improving oversight, transparency, and compliance in cotton exports.
Under the revised rules, exporters are now required to submit a security deposit equal to 1 percent of the total contract value with the State Bank of Pakistan.
Exporters must also present a confirmation letter issued by the SBP to customs authorities along with the shipping documents before goods are cleared.
In addition, buyers are required to open an irrevocable letter of credit for cotton exports. The shipment of the contracted quantity must be completed within 180 days from the opening of the letter of credit.
If the exporter fails to meet the agreed shipment timeline or does not ship the full contracted quantity, the State Bank of Pakistan will forfeit the security deposit. The forfeiture will be proportional to the quantity that remains unshipped.
Officials believe the move will strengthen financial discipline in cotton exports and reduce the risk of contract defaults.
By placing export-related controls with the central bank, the government aims to ensure better monitoring of export proceeds and improve overall trade governance.
The decision is also expected to support Pakistan’s cotton sector by bringing greater credibility and consistency to export operations, while aligning trade practices with financial regulations.