ISLAMABAD - The ministry of commerce is all set to present the five-year Textile and Apparel Policy 2020-25 in Economic Coordination Committee (ECC) of the Cabinet for approval.
The government in new Textile and Apparel Policy would give cash subsidies and would provide gas and electricity at lower rates to enhance the production of textile sector. The support for the textile sector runs in billions of rupees, especially under the head of subsiding utility cost. An official of the ministry of commerce informed that government would provide electricity and gas at regionally competitive rates throughout the policy years to the export oriented sectors. The government has fixed the exports target for the textiles and apparel industry at $20 billion for the current fiscal year.
The ECC in October 2021 had not approved the much-awaited draft Textile and Apparel Policy 2020-25. In previous draft of the policy, the government had proposed cash subsidies and lower rates on utilities worth Rs960 billion to boost production and exports of value-added textile products. Under the proposed policy, it was suggested that electricity would be provided at US cents 9 per kWh all-inclusive and RLNG at USS 5.5 per MMBTU all-inclusive during the current fiscal year. However, the ECC had raised objections over the subsidy to be given on gas prices as the previously allocated amount was not sufficient now as the cost of gas has increased many folds in the past few months.
The ECC had constituted an inter-ministerial committee on it. The revised draft of new five-year Textile and Apparel Policy is in line with the recommendations of an inter-ministerial committee. One of the major changes in the Policy 2020-25, is to delink duty drawback scheme (DLTL/DDT) with increment in exports.
The government in official documents said that in tandem with Strategic Trade Policy Framework (STPF), the Textile Policy 2020-25 is also being launched by the Ministry of Commerce. The Policy is aimed at utilizing the potential of home-grown cotton augmented by Manmade Fiber/Filament to boost value-added exports and become one the major players in global textile supply chain. The textile sector will provide a conducive business environment; consistent, predictable and foreseeable measures will be taken to create a level playing field for the domestic and export oriented textiles value chains.
The main objectives of the proposed policy are to leverage the advantage of a complete textiles and apparel supply chain by encouraging value-addition at each stage of processes, especially in the finished products, to restore the profitability of cotton farmers by increasing yield, improving quality and decreasing cost of production, and strengthening the Man-Made Fibre (MMF) sector to make this chain export-oriented as well as supporting textiles and apparel value-chain for not only baseline monitoring reports (BMR), but also new capacities.
The policy also stresses upon the need to formulate marketing and branding strategies to promote ‘Made in Pakistan’, facilitate international buying houses to establish offices in the country, and initiate mass level training programmes, especially for small and medium-sized enterprises (SMEs) and women for skill development.