Import of textile machinery declines

Import of textile machinery declined by 42 percent during the first month of the current year as compared to the same period of last year, persistently inflating cost of doing business which is denting the sector's performance badly in the country. Informed sources in the Textile Ministry revealed that during July 2011, textile machinery worth $24.6 million was imported. Import of textile machinery in July fell short by 12 percent of previous month import.
They further revealed that textile machinery worth $444 million was imported during 2010-11 against $380 million in 2009-10, registering an increase of $64 million after the announcement of new textile policy. However, a sharp decline is expected this year due to energy shortage in the country. Textile industry gets gas only 4 to 5 days a week and also faces unscheduled power outages. In these conditions a further decline in investment in the sector is expected, sources maintained.
Another reason for decline in import of textile machinery is attributed to government's failure to decide about the specifications of the machinery/equipment eligible under the Technology Up-gradation Support Fund, which is delaying implementation of the incentives for textile sector. "Under the scheme the federal government would pick-up 50 percent mark-up subject to a maximum of 5 percentage point per annum for projects exceeding investment of Rs 10 million in machinery technology," sources revealed.
The government had announced Technology Up-gradation Support in Textile Policy (2009-14) and later issued Technology Up-gradation Support order 2010 in April 2010 to provide incentives to textile machinery and technology to attract investment in textile sector.
According to notification, "Technology Up-gradation Support" Order 2010 shall be effective from September 01, 2009 and shall remain valid up to June 30, 2014. Disbursement under this order will continue for the duration of loan obtained till June 30, 2014; however the scheme is yet to be implemented. It was also announced that the investment support shall cover only the technology and machinery identified under this Order by a Financial and Technical Committee to be constituted and notified by the Ministry of Textile Industry. The committee shall also permit the percentage of interest reimbursement/capital grant by the government of Pakistan depending on the technology and value addition.
The government had also issued an illustrative list including Machinery/equipment eligible under the scheme will include: (i) industrial stitching machines; (ii) garment dyeing machines; (iii) garment special effects machines; (iv) processing plants; (v) shuttle less looms; (vi) knitting machines; (vii) yarn dyeing; (viii) yarn singeing; (ix) open end machines; (x) ring machines for finer counts; (xi) ginning machines; (xii) power generation equipment for textiles and clothing units; (xiii) effluent treatment plants; (xiv) energy saving equipment; (xv) textiles testing equipment; (xvi) CAD/CAM/CIM system; (xvii) machinery for technical textiles/non woven; (xviii) quilting machinery and equipment; and (xix) fiber/filament manufacturing machinery. Similarly machinery attachments for value addition include: (i) course filament yarn; (ii) compact spinning; (iii) spandex yarn; and (iv) slub yarn. The committee has been constituted in February 2011, but the list is yet to be finalised.