Commerce Minister Engineer Khurram Dastgir Khan has constituted a committee headed by Secretary Commerce Shahzad Arbab to prepare a policy action plan for redressing impediments confronted by the textile industry in increasing its exports. The committee comprising representatives of Ministry of Textile Industry, All Pakistan Textile Mills Association (APTMA) and Federation of Pakistan Chambers of Commerce and Industry (FPCCI), will present its recommendations by next month.
The proposals will then be forwarded to Prime Minister Nawaz Sharif for swift decisions in order to reverse the declining trend in Pakistani exports. This was decided during a meeting chaired by the trade minister with the representatives of APTMA which was also attended by CEO Trade Development Authority of Pakistan S M Muneer and President FPCCI Mian Muhammad Idrees.
APTMA apprised the minister about the multifarious issues faced by the domestic textile industry which has rendered the industry uncompetitive vis-à-vis the regional competitors. APTMA proposed to bring about a level playing field for Pakistani textile producers as the regional competitors are heavily subsidising and supporting their textile industry. According to S M Tanvir, 30 percent textile exports in quantitative terms have declined. Besides this, Rs 170 billion financial burden has been imposed on the textile industry in the name of surcharges and taxes.
APTMA has demanded zero rates all taxes levied on exports, provision of regionally competitive electricity tariff of Rs 9 per unit for textile industry and export refinance and Long Term Financing Facility (LTFF) for entire textile chain. The association power tariff for textile sector in the region is 7-9 cents per unit and if the government given special tariff of Rs 9 per unit, Pakistan textile industry will become competitive. It was also argued that power sector's losses and inefficiencies are passed on to the textile sector which has made the industry uncompetitive.
According to sources, APTMA further stated that Pakistani rupee is 10 percent overvalued, requesting its adjustment to help the industry. It was also stated that no new investment is made in the textile sector for the last six years. It was demanded that the government should also take strict action in case where dumping and smuggling of goods is reported. According to an official statement, the trade minister directed the committee to hold negotiations with all the fourteen associations of textile sector and bring about viable proposals keeping in view the constraints faced by the government.
He further directed that issue of electricity provision, electricity tariffs, small taxes on textile value chain, rising cost of production of Pakistani textile products as compared to the regional competitors, lack of new investments in the textile sector, export incentives for the textile industry, availability of finances for the sector and the declining share of Pakistani textiles in the world exports may be may be thoroughly discussed in the committee.
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