Commerce Ministry tells Senate panel it can keep operations running despite expected budget tightening, while seeking higher TDAP funding to support exports.
Senate Panel Briefing: Why Budget Pressure Is Rising
The Ministry of Commerce has told the Senate Standing Committee on Commerce that it is ready to keep operations running even if its non-development budget is cut by as much as 50% in the next fiscal year. Officials linked the expected tightening to growing fiscal pressure driven by the evolving Middle East situation and its spillover into Pakistan’s finances.
Commerce Secretary Jawad Paul, testifying before the committee chaired by Senator Anusha Rahman, said spending space is already shrinking. He noted that non-Employee Related Expenditure (non-ERE) releases for ministries were reduced by 20% in the fourth quarter of FY2025-26, and further tightening is expected in FY2026-27.
During the meeting, Senator Saleem Mandviwala highlighted how limited the government’s fiscal room has become. He pointed to a recent Rs80 billion subsidy on petroleum products and warned that Pakistan’s fragile financial position could make it difficult to accommodate increased demands from ministries in the next budget cycle.
What the Ministry Is Asking For: A Modest Increase, But With Contingency Planning
Despite the warning that allocations could be reduced sharply, the commerce secretary said the ministry would still prepare expenditure plans even in a severe cut scenario. At the same time, the ministry has proposed a modest 9% increase in its own budget for FY2026-27 compared to the current year.
The proposal places the ministry’s combined employee-related and non-employee-related allocation at Rs1.707 billion for FY2026-27, up from Rs1.562 billion in FY2025-26. The message to lawmakers was clear: the ministry is signalling operational discipline and readiness to absorb cuts, while still seeking enough headroom to keep basic functions, compliance, and trade-facing services intact.
In practice, “operating with a 50% cut” typically means pushing travel, discretionary events, consultancies, training budgets, and operational support to a minimum. It can also mean heavier reliance on digital tools and stricter prioritisation of activities that directly influence export facilitation, trade negotiations, and dispute handling.
TDAP Funding Jump: Export Competitiveness at the Centre of the Debate
The largest budget pressure point discussed in the committee was not the ministry’s own running cost, but the proposed jump for the Trade Development Authority of Pakistan (TDAP). The commerce ministry has sought Rs9.951 billion for TDAP in FY2026-27—an increase of 283% compared to Rs2.6 billion allocated in the current fiscal year.
The committee was given utilisation details that suggest TDAP’s funding is already tight. Out of the current year’s allocation, Rs1.811 billion had been released by March 31, 2026, and about 90% had reportedly been utilised by March 21. That pace indicates limited flexibility in the remaining quarter, especially if TDAP is expected to support trade events and export promotion commitments.
Officials argued the proposed increase is partly driven by a policy change: the abolition of the Export Development Surcharge (EDS), recommended by a committee constituted by the prime minister. With EDS removed, the government would need to provide more direct budget support to maintain export competitiveness relative to regional economies. However, lawmakers flagged the obvious risk: even if TDAP needs the money, fiscal constraints may prevent the government from meeting the full requirement.
EDF, Trade Schemes, and the Quetta Expo Centre Decision
To manage the funding question more realistically, the committee recommended that TDAP submit its annual business plan to the Export Development Fund (EDF) board by April 2026 so allocations can match available fiscal space. Commerce Secretary Jawad Paul directed TDAP to ensure submission by April 30 and secure EDF board approval. Lawmakers also suggested TDAP should prioritise international exhibitions financed through EDF resources rather than relying heavily on the federal budget.
Beyond TDAP, the ministry proposed allocations for attached organisations, including Rs248 million for the Pakistan Institute of Trade and Development (PITAD), Rs142 million for the Directorate General of Trade Organisations (DGTO), Rs415.5 million for the Trade Dispute Resolution Organisation (TDRO), and Rs914 million for the National Tariff Commission (NTC). In addition, the proposal includes Rs20 billion under EDF, Rs12.158 billion for the DLTL and TUFF schemes, and Rs7.427 billion for trade missions abroad.
The committee approved the proposed budget demands for the ministry and its attached entities. It also approved Rs4.83 billion for the Quetta Expo Centre project, but with a key condition: the site must be relocated. According to Senator Mandviwala, Balochistan Chief Minister Sarfraz Bugti agreed to construct the facility at a site recommended by the committee.
To settle the dispute, the committee invited the chief minister to attend its March 31 meeting—either in person or via video link. Lawmakers from Balochistan have opposed the current location, and the committee urged the provincial government to allocate land for the expo centre from 125 acres already available with the National Disaster Management Authority (NDMA). However, the commerce secretary expressed reservations about pursuing the matter jointly with NDMA, signalling that the inter-agency route may be administratively complex.
