MoTI pessimistic about instant growth in textile exports

Ministry of Textile Industry as well as industry stakeholders are pessimistic about an instant growth in textile exports, saying it would take around six months time to avail and utilise incentives announced by the government. Prime Minister Nawaz Sharif had announced incentives worth Rs 180 billion on January 10, 2017 in a bid to boost country's falling exports; however the incentives were notified on January 23 for textile sector and on February 2 for non-textile sectors.
Spokesperson for Ministry of Textile Industry Kanwar Usman toldBusiness Recorder that after the notification of incentives there were only seven days in the month of January and in such a short time it was not possible to show results. The PM's incentives package would give partial result in terms of increase in exports in data for February which is yet to be released and would bring a visible difference in March, Usman added. Pakistan's textile exports fell by 1.5 per cent in January 2017 as compared to the same period of last year, the spokesperson added.
The country's textile exports are showing dismal performance for the last three years and this trend disturbed the government and compelled it to announce a package according to which drawback would be available to garments at 7 percent, made-ups at 6 percent and processed fabrics at 5 percent. For the very first time it is extended to yarn and greige fabric at 4 percent.
Chairman Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Ijaz Kokar said that shipment is being carried on deferred payment due to tough competition in the market. It takes around 90 days to get payment; hence it is difficult to show immediate growth in exports. He further said that a quick jump in exports would happen if the government releases the outstanding refunds on account of sales tax.
Pakistan Apparel Forum Chairman Muhammad Jawed Bilwani expressed deep concern over decline in textile exports in general and of garments in particular and demanded the government to immediately release all pending sales tax refunds, custom rebate claims, DLTL claims and WHT claims to provide relief to the textile exporters so that they could focus on increasing their exports.
Referring to exports statistics for the month of January 2017, Bilwani said that exports of knitwear declined by 3.44 percent, readymade garments declined by 3.60 percent as compared to January last year. "During seven months (July-January 2016-17) total exports of textile products declined by 1.54 per cent over last year," he said, and added, in the year 2010-11 (July-Jan) exports of textile were $7.45 billion while today they stand at $7.34 billion during the first seven months.
Balvani said that the main reason for decline in exports was that the exporters were facing tough competition from neighbouring countries due to ever-increasing cost of production on one hand while there was persistent liquidity crunch on the other. He acknowledged that the government had been successful in reducing the electricity and gas load shedding to a great extent. However, he said, the cost of production was the main factor behind slowdown in exports which had led to lower production and closure of a number of export-oriented industries which had finally resulted in a drop of textile exports.
He further said that it was an irony that PM package was announced a day before Heimtextil - an exhibition held in Germany - kicked off (10-13 January 2017) due to which the foreign buyers immediately demanded more discounts from the exporters of home textiles (who were granted 6 percent rebate under this package).
"We are unable to understand the objectives behind announcing export package a day before Heimtextil which prompted buyers to ask for more discounts," he added. "Unwillingly the exporters had to give around 3 percent discounts to keep the buyers while in return they found the price of yarn increased by 6 percent," he said, adding this way the export package failed to provide any relief/benefit to the exporters of home textiles.