LAHORE -  The overall textile exports continued to present a dismal look for another year ending December 31, 2016 as the industry rendered unviable by the high cost of doing business as a consequence of which textile exports fell further by $600 million.

Total exports are apprehended to fall by $1.2 billion in the current year as per the present trend. Foreign exchange receipts on trade account are important to be revived and given a new impetus to arrest the country’s trade deficit that has swelled to an alarming and unmanageable level of $28.3 billion. This gap cannot be bridged until export-led growth policy initiatives are undertaken in right earnest.

APTMA Chairman Aamir Fayyaz said that the textile industry continued to face the handicap of being 10 percent expensive as against international competitor owing to unrealistically high energy cost. “Since 2013, the price of energy has been higher than that of competing countries by 4 cents per Kilowatt hour,” he added.

He said that due to unrealistically high energy price in the province – where 70% of the country’s textile industry is located – the Punjab-based textile industry was exposed to a severe disparity in energy prices. Resultantly, a bulk of the textile manufacturing capacity lies underutilised and over 70 textile mills have shut down in the last six months.

The two basic raw materials of textile industry viz, cotton and man-made fibres, to which the textile industry adds value for export, have to be imported as their domestic availability falls far short of the industry’s requirement.

He said that domestic commerce in textile and clothing has been swamped by subsidized imports and smuggled goods, a situation which has in part led to the closure of as many as 70 mills in the province of Punjab. He pointed out that the already signed and about-to-be-signed Free Trade Agreements are posing a serious challenge to the domestic industry, as the competition in the world market is concerned. “Manufacturing has been replaced with trading because of the shattered confidence of investors,” he added.

In this backdrop Pakistan’s currency that in dollar terms is 10% overvalued has an inhibiting effect on exports and adds to the already bleak picture. He said the time has come that the government should revisit its policies towards the textile industry. He further expressed hope that policymakers would take concrete steps in reviving the ailing textile industry in 2017.