Lahore

As the exports of textile and clothing have been declining sharply during the first four months (July-Oct) of 2015-16 the value-added textile industry has cautioned the government to address the problems of the sector, as the current drop in exports may widen further in the next quarter.
PRGMEA chief coordinator Ijaz Khokhar asked PM Nawaz Sharif to personally intervene, making a policy for reduction in all input costs otherwise the export-oriented industries would not only close down their operations but millions of workers would also lose their jobs. He said that the PM had committed to hold meetings with export-oriented industries on quarterly basis but no such meeting was held so for.
PRGMEA chief coordinator said that this is because of the fact that the value added textile sector is burdened with multiple taxes with high cost of inputs, tariffs of gas, electricity, raw material, etc, and is further harassed due to short supply of all these most essential utilities, he added.
Ijaz Khokhar said the government has increased the sales tax from 2% to 3% in the budget, which led to piling up of exporter’s refunds with the tax department. The government has also imposed 10% regulatory duty on yarn imports from India, mostly used by knitwear and woven apparel segments, to further increase the cost of doing business, he said. Thus, price of domestically produced yarn increased manifold, he added.
Pakistan Knitwear and Sweater Exporters Association North Zone chairman, Shahzad Azam Khan, observed that country will face a drastic decline in its export following the attacks on France. According to him, the exports have dropped by 10.63% to $1.051 billion monthly in October 2015 from $1.176 billion in the same month last year in spite of GSP plus status granted to Pakistan. Quoting latest figures, he said that exports of value-added textile sector, after increasing for three consecutive months, also witnessed a negative growth due to harsh decisions against the value-added sector. The sector exports had grown by 3% in July-Sept 2015-16. But during October 2015, readymade garments exports fell by 0.36%, knitwear 9.5% and bedwear by 8.92%. The textile exports of Pakistan got a boost of 13% due to import duty concessions under the European Union’s (EU) Generalised System of Preferences (GSP) scheme in the outgoing fiscal year.
Shahzad Azam Khan observed that the value-added textile sector is not against spinning sector but it wants that whole textile chain be safeguarded because the sector has a tough competition in garments with regional competitors like Bangladesh, China and India.
Shahzad Azam suggested that import of yarn should be totally tax-free besides the imports of garments and unstitched clothes should be banned, so that the local industry could be boosted. When Pakistan was granted GSP Plus status by the EU the Indian government immediately announced incentives for its exporters to compete Pakistan. And again the Indian government announced rebate for its yarn exporters when Pakistan imposed additional 10 percent duty on import of yarn from the neighbouring country.
Shahzad Azam demanded the liberal import policy for raw materials for re-export like duty-free import of fabrics and accessories same as Bangladesh.
PRGMEA NZ Chairman Sohail Sheikh observed that besides improving law and order, and providing non-stop gas and electricity supply, the government would have to relax import policy to empower value-added textile industry to get the maximum benefit of GSP Plus status, as the country had no raw material except cotton.
Sohail Sheikh said that the bleak exports figures clearly indicate that the country’s value-added textiles are falling to an alarming level. He slammed the indifferent attitude of TDAP, commerce as well as textile ministries for showing no signs to address the serious exports matter and unfold its preparation to salvage the national economy.