PTEA seeks incentives to boost exports

Textile exporters have urged upon the government to announce special incentives for the sector in the next budget to boost the country's exports. Sohail Pasha, Chairman, and Rizwan Riaz Saigal, Vice-Chairman, Pakistan Textile Exporters Association (PTEA), said on Friday that after enduring a difficult year, the textile exporters pinned high hopes on the next fiscal year. "2014 remained a very difficult year for textile sector, as the industry faced severe energy crises, scarcity of funds, rising cost of production and deteriorating economic conditions," they added.
They said that most ticklish issue was the rising cost of production, as prices of raw materials and inputs skyrocketed, making our products uncompetitive in the world market. "Severe energy shortage and high cost of doing business, which have stalled fresh investment in manufacturing for some years, have now brought the country's textile industry, particularly in Punjab, to a point where large-scale closure cannot be ruled out," they added.
They further said that growing energy shortage had affected almost one-third of the country's textile manufacturing capacity and adversely hit its reputation as a credible supply source. "Our exports are becoming dearer than its regional rivals like China, Bangladesh and India owing to rising energy, credit and labour costs. With the current situation of energy supply to a much larger province, which covers 70 percent of textile sector, the plan of doubling textile exports to USD 25 billion from current USD 13.5 billion under the textile policy 2014-19 is nothing more than a dream. Although, GSP Plus window has increased the flow of orders to textile sector, but exporters are unable to utilise their production capacity mainly due to shortage of electricity and gas," they said.
They said that the value added textile sector, which contributed around USD 10 billion to the total textile exports, was likely to remain stagnant in future as Punjab-based textile industry was in grip of severe energy crisis and receiving only 25 percent of gas even during the extreme hot weather. This, they added had badly affected the production and enhanced cost of production.
They pointed out that the industries in other provinces were enjoying 100 percent gas supply making Punjab based-textile sector uncompetitive within the country. They urged upon the government to allow zero rating sales tax facility to export oriented textile chain in the next budget to boost exports and strengthen the national economy. They also stressed for immediate payment of custom refund claims of textile exporters to ease their financial stress.
PTEA Chairman Sohail Pasha was of the view that lack of fresh investment in technology and capacity expansion was enormously eating up the country's share in global textile trade. Referring to WTO's regional textile growth numbers for 2006-13, he said that the country's share in the global textile trade of USD 718 billion had dropped to 1.8 percent, with exports from its regional rivals growing at a much rapid pace. PTEA urged the government to take cognisance of this serious matter and immediately address the issues that are hindering economic activities.