Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) has urged the government to address all issues of value-added textile sector immediately, as the continued drop in exports may widen further due to Vietnam-EU Free Trade Agreement (FTA), massive decline in cotton production and high import duty on yarn.
PRGMEA Chief Co-ordinator Ijaz Khokhar asked the government to take preventive measures following the EU and Vietnam FTA, as the emerging economy can capture Pakistan export market, which has already shrunk due to high energy cost and discriminating import duties on industry raw material. The exports of textile and clothing have been declining sharply during the last six months (July-December of 2015-16) along with low cotton yield in Punjab.
PRGMEA chief co-ordinator asked PM Nawaz Sharif to personally direct policy makers to work for reduction in all input costs otherwise the export-oriented industries would not only close down their operations but millions of workers would also lose their jobs. He said that the PM had committed to hold meetings with export-oriented industries on quarterly basis but no such meeting was held so far.
PRGMEA chief co-ordinator said that this is because of the fact that textile sector is burdened with multiple taxes with high cost of inputs, tariffs of gas, electricity, raw material, and is further harassed due to short supply of all these most essential utilities, he added. He further said country is facing almost 35 percent shortfall in cotton production as cotton bales arrival has registered nine million bales against the set target of 14 million bales. Despite huge shortfall of cotton, 10 percent regulatory duty on cotton yarn import from India is not understandable which will not only to encourage cartelization but also squeeze raw material availability in the country, he added.
He said, "Also there is no regulatory duty on yarn import from India, as the spinning sector has already booked orders for import of two million bales without any regulatory duty. This is discriminatory policy which will hurt garment export very badly." "Vietnam is emerging market of garment and has become a major threat particularly for Pakistan textile sector after striking FTA with EU, as the country is already exporting US 23 billion dollars garments against Pakistan's just US five billion dollars textile goods," he mentioned.
Ijaz Khokhar said that Vietnam has achieved the milestone amid huge foreign direct investment due to attractive policies, which will surpass even the Bangladesh textile export of US 27 billion dollars, because the country has fixed the target of 30 billion dollars textile export for current fiscal year.
This agreement is the first of its kind that the EU has concluded with a developing country, which will definitely benefit from its FTA on very nominal duties. Khokhar feared that Vietnam will capture Pakistan textile export market despite having status of GSP Plus because Pakistan is not availing this facility due to very limited product lines mainly due to strict import policy of government. He underscored the need for formulation of sector wise policies with the consultation of stakeholders for bringing boom in export of the country. He said that it would not only help in increasing exports but also supportive in minimising problems confronted by the business community.
Comments
Comments are closed.