LAHORE/karachi - All Pakistan Textile Mills Association has expressed worries over declining trend in exports of textile industry, saying that the industry is becoming ‘history’ fast since the government has turned its back.
“The Association has blowing the whistle constantly over decline in textile industry exports but the government has done little to arrest the trend,” he added.
Aptma chairman said latest export data has revealed that textile exports have registered a decline of six percent in value terms in May 2015 against the corresponding period. In quantity terms, he added, exports of cotton cloth, towel and art, silk and synthetic textile have also lost their positions against the corresponding period.
He said unfortunately textile and clothing exports were stagnant since 2006 against regional competitors, doubling their exports.
He said high cost of doing business and absence of conducive environment has impaired 30 percent production capacity resulting into loss of textile exports worth $3325 million.
“Issues like gas and electricity supply cuts, energy affordability, incidentals of taxation and over-valued Pak rupee have has hampered growth and textile industry has been left behind technologically in the region,” he said.
He has urged the government to ensure zero rating of export oriented textile industry for all incidentals including taxes, duties, surcharges, levies and cess by extending drawbacks receipts realised by the State Bank of Pakistan at 5 percent on yarn, 10 percent on fabrics and 15 percent on made ups/garments.
He has further urged the government to provide support of long term finance facility for replacement of old machines in textile mills.
‘Textile exports could decline by 25% in fiscal year 2015-2016’
Despite grant of GSP Plus, Pakistan’s textile exports declined by 1.7% in July-May 2014-15 over same period of last year. If GSP Plus had not been granted to Pakistan, the textile exports would have faced a decline of 13.1%, stated Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum.
Bilwani rued that just because the high costs of inputs such as gas, electricity and water and 50pc increase in Sales Tax, it is not possible for us to compete in the global market. With the warning by the European Union that GSP Plus could be withdrawn, he said, it can be imagined what would be the scenario of textile exports.
Bilwani elaborated that if the government pays no heed to such adverse factors faced by the textile exporters and does not reduce the costs of inputs in comparison to our neighbouring competing countries and also does not revive the “zero rated regime” - “no payment no refund” for the exports, textile exports would surely decline by 25% in next fiscal year 2015-2016 as compared to 2014-2015.
It is indeed alarming that the European Union has given a warning to Pakistan that effective implementation of the international conventions is a requirement under the European Union’s GSP + Regulation granted to Pakistan.