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MoC to support textile policy

Ministry of Commerce (MoC) is unlikely to include any incentives for textile sector in the forthcoming Strategic Trade Policy Framework 2015-18 (STPF) but intends to continue to extend all possible support to Textile Policy, well informed sources told Business Recorder. Textile sector's share in country's exports is around 60 per cent but its share in global trade is on the decline due to domestic impediments and global recession.

Commerce Ministry has constituted a committee comprising representatives of Ministry of Textile Industry, APTMA, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and other concerned Ministries under the chairmanship of Secretary Commerce to prepare a policy action plan for redressing impediments facing the textile industry with the objective of increasing its exports.

"We will not include anything in STPF about textile sector rather will continue to support Textile Policy which is sector specific," the sources added. According to sources, the proposals to be prepared by the committee will be forwarded to Prime Minister Nawaz Sharif for swift decisions in order to reverse the declining trend in Pakistani textile exports.

The sources said, APTMA had informed the Commerce Ministry about the multifarious issues faced by the domestic textile industry which has rendered the industry uncompetitive vis-à-vis the regional competitors. APTMA maintains that it should be provided a level playing field as regional competitors are heavily subsidising and supporting their textile industry.

Commerce Ministry has confirmed that in quantitative terms textile exports have declined by 30 percent. Textile sector argues that a Rs 170 billion financial burden has been imposed on it under the guise of surcharges and taxes. APTMA has demanded zero rates of all taxes levied on exports, provision of regionally competitive electricity tariff of Rs 9 per unit for textile industry and export refinance and Long Term Financing Facility (LTFF) for the entire textile chain. The power tariff for textile sector in the region is 7-9 cents per unit and if the government provides a special tariff of Rs 9 per unit, Pakistan textile industry will become competitive, APTMA contends. It also argues that power sector's losses and inefficiencies are passed on to the textile sector which has made the industry uncompetitive.

Finance Minister, Senator Ishaq Dar has convened a meeting with the textile sector on Saturday (today) to discuss their demands including depreciation of rupee. Besides this, electricity provision, electricity tariffs, small taxes on textile value chain, rising cost of production are likely to come under discussion. Textile sector maintains that Pakistani rupee is 10 percent overvalued, which needs to be adjusted, adding that new investment has not entered the textile sector for the last six years.

Copyright Business Recorder, 2015


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Banking Review 2014

Foreign Debt $62.649bn
Per Cap Income $1,512
GDP Growth 4.24%
Average CPI 8.6%
Trade Balance $-1.988 bln
Exports $1.835 bln
Imports $3.823 bln
WeeklyOctober 08, 2015
Reserves $20.05 bln