Pakistan Textile Exporters Association (PTEA) has urged the government to ensure level-playing field for textile industry as it has lost its viability against the regional competitors; about 30 percent industry has closed down its operations and 20.37 percent country's exports have been declined in September. Addressing a press conference here on Wednesday, Asghar Ali, Chairman Pakistan Textile Exporters Association said that Textile industry, particularly in Punjab is in grip of unprecedented crisis since many years and is struggling hard for its survival.
Terming high production cost as major cause of the crisis, he said that high energy tariffs and unavailability of liquidity have disrupted the competitive edge of textile exports in international market. Several types of surcharges have escalated the gas and electricity tariffs. Quoting the energy tariffs, he said that electricity is being provided to textile sector at Rs 12.65 per unit after fuel adjustment against the average price of Rs 9 per unit in the region. Similarly, gas price in Pakistan is 6.7 dollar per mmbtu while in India, it is 4.2 and in Bangladesh is 3.1 dollar per mmbtu.
Imposition of GIDC in gas bills has further increased the gas cost by 23 percent. The government, besides encouraging the alternate energy, has increased import duty on coal from 1 percent to 5 percent in the budget. Energy constraints have halted the industrial wheel as textile industry particularly in Punjab faced 27 percent gas load shedding in 2010, 41 percent in 2011, 46 percent in 2012, 66 percent in 2013, and 70 percent in 2014.
Ahmad Kamal, Group Leader PTEA said that due to inefficient and unfriendly socio-economic environment, the cost of production in Pakistan has escalated enormously due to intermittent rise in energy tariffs, crippling burden of taxes and lack of finance rendering our exports are uncompetitive in international market.
Taking advantage, rival countries are creeping into our hard earned traditional markets throwing the Pakistani textiles out. He stressed the need for creating a stable environment to deal with competitiveness issue as country's textile industry has lost its viability against regional competitors. Textile industry is the only hope for revival of country's economy which is currently jolted by high cost of doing business, he said. Rana Arif Touseef, former Chairman of the Association, addressing the press conference said that billions of rupees of textile exporters are stuck up in refund regime from years and textile owners are facing severe cash flow crunch. Without its basic working capital, no industry can survive, he said and added that achieving target to double textile exports appears to be a herculean task in the perspective of 20.37 percent drop in country's exports in September. Numbers of coming months might be even worse, as the textile industry, particularly in Punjab is in grip of severe crisis.
PTEA urged the government to restore the competitiveness of the industry by ensuring uninterrupted supply of gas and electricity at regionally affordable rates, liquidation of all pending refunds, removal of all innovative taxes and restoration of zero rating regime for textile export chain. The Government should step up to save precious forex earning sector from disaster as challenges like energy crisis and high production cost is holding this mainstay of national economy back from growing up to full potential.
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