Textile exports may fall by $3bn this year, warns APTMA
- Says additional capacity remains nonoperational due to forex issues and the unavailability of energy
Pakistan’s textile exports could fall by $3 billion this year as compared to last year, the All Pakistan Textile Mills Association (ATPMA) has said while urging authorities to take immediate and urgent intervention.
The concerns were expressed by APTMA Patron in Chief Gohar Ejaz in a letter to Prime Minister Shahbaz Sharif dated March 31.
Ejaz said that the textile exports for February 2023 clocked in at $1.2 billion while the sector could easily generate $1.7 billion per month in line with exports achieved last year.
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He said that additional capacity has also been installed or is under installation through an investment of $5 billion. However, it remains nonoperational due to forex issues and the unavailability of energy.
“The decline in textile exports has been progressively accelerating,” he said.
“The progressive decline in exports is a consequence of the moratorium on import of raw materials and essential spare parts, lack of adequate supply of energy at competitive prices and failure of the sales tax refund system, all have contributed significantly to the closure of over 50% of industry.
“Given the trajectory of decline, Pakistan is likely to fall short by $3 billion in textile exports from the exports achieved last year of $19.4 billion without taking into account any increase from newly installed capacity,” warned Ejaz.
APTMA also called for the implementation of a uniform gas price of $7 per MMBtu for the export industry across the country.
It urged the authorities to restore SRO 1125, Zero rating for the textile value chain while collecting sales tax on domestic sales at the point of sale, and immediately refund all sales tax, tuff and other dues.
Ejaz further said that the Export Oriented Sectors should be allowed to open Letters of Credit without hindrance for raw material machinery, spare parts and other items to restore the industry’s supply line.
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The letter comes as Pakistan’s economy is in dire straits, stricken by a balance-of-payments crisis as it attempts to service high levels of external debt amid political chaos and deteriorating security.
Inflation has skyrocketed, while the rupee has plummeted and the country continues to face a shortage of US dollar, which leaves little space for imports, causing a severe decline in industry.
Meanwhile, the APTMA chief in his letter urged the authorities to clear all imports of the Export Oriented sector.