Exports, imports and remittances: Value-added textile sector seeks separate forex rates

KARACHI: The value-added textile sector Saturday asked the government to fix separate forex rates for exports, imports and remittances, saying the fragile economy has outgrown the cost of manufacturing.

“The country’s value-added textile export sector is “highly disappointed” over growing costs, “Muhammad Jawed Bilwani, Chief Coordinator, Value-Added Textile Forum said.

Inflation hits 31 percent, with policy discount and export financing rates 16 percent and approximately 11 percent, respectively, he said.

Gas, which is a primary source of energy, is unavailable for the export industries. “The DLTL under textile policy stays suspended. Sales tax refunds are excessively delayed.”

The government has also imposed “severe” restrictions on the import of raw material and machinery, which made the financial crisis worse for the entire sector, he added.

Textile exports left to wither

The anti-economy statements of political elements about the country’s fall in ‘default’ state have also rattled the exporters’ confidence, he said.

“Print and electronic media is projecting a bleak picture of the economy with reports that Pakistan has reached on the verge of default which has created a very negative impression in the eyes of foreign buyers who deal with Pakistani exporters,” Bilwani said.

He said export-oriented sectors are compelled to purchase costly inputs to operate the industry, which has “exorbitantly” increased the cost of manufacturing.

Textile exporters pay sales tax on yarn purchase, which they procure in advance. “Refunds of sales tax and rebates are often delayed” he said. “The gravity of the situation demands that the government must support “export-oriented industries” on war footing and fix dollar exchange rates for exporters separately,” he added.

He said the government should consider allowing a special five percent increased rate of margin in dollar exchange for both export proceeds and home remittances to boost business confidence.

The Prime Minister and the Finance Minister should resolve the export-oriented sector’s financial problems and meet their demands as well, he maintained.

Copyright Business Recorder, 2022