LAHORE: Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has lamented that the import restriction by the State Bank of Pakistan would hinder the smooth process of future export orders, leading to declining foreign inflows amidst depleting foreign exchange reserves which are presently at the lowest ebb in the country.
PHMA Zonal Chairman Naseer Butt sought the prime minister’s intervention to exempt whole textile export sector against restrictions imposed by the central bank, allowing import of all kind of textile industry raw material to enhance exports growth, as the authorities have placed the import of the textile industry’s raw material on third priority.
He said that the hosiery industry is facing undue delay in sales tax refunds and restrictions on import of raw material, resulting into inordinate delay in export orders and damaging the reputation of the country. He called for continuation of Duty Drawback of Local Taxes & Levies (DLTL) Scheme to ensure growth in country’s exports, besides releasing the stuck up claims of 2019-20 under this scheme.
The PHMA members are facing severe liquidity crunch due to undue delays in release of sales tax stuck up refunds, besides the hurdles created by the SBP to open LCs to proceed export shipment, he said.
He said that refunds of sales tax of exporters should be paid immediately so that the financial difficulties of exporters can be reduced. He said that due to non-opening of LC, we are facing embarrassment in the international market.
Moreover, consignments of industry raw material remained stuck at the port despite the government had lifted the ban on the import. As a result the exporters are facing huge cost of demurrage due to delays, which is an additional cost for the industry.
He said the government needs to take immediate measures to arrest the slowdown in textile exports, as these policies would bring Pakistan’s most valuable sector on the verge of collapse.
The PHMA zonal chairman said the government lacks a clear direction and its careless conduct has brought a disaster to the industrial sector and sabotaged exports, as the financial crisis for the exporters outgrows with foreign buyers showing reluctance to place orders with the local textile makers.
He said that textile export industries are denied LCs to import raw materials and accessories for manufacturing purposes. Resultantly, the blocking of LCs has wreaked havoc on the export sector, causing a severe disruption and delays in completion of foreign orders. He feared the government’s continuing policy of blocking LCs may lead to the cancellation of international orders.
If the import of raw materials is not allowed, the exporters will not be able to fulfill their orders, he said and added that exporters should be allowed to import 35 percent value of raw material against 100 percent value of export because without the import of raw material, exports cannot be done.
He demanded that in exchange of 100% value of export, exporters should be allowed to import raw material equal to 35% value because without import of raw material we cannot export. The government has completely failed to solve these problems and the country’s economy is on the verge of collapse due to the clear difference in the exchange rate of the dollar.
Naseer Butt said that the PHMA wanted to strengthen the sinking economy by increasing domestic exports, which is not possible without allowing import of textile sector’s raw material.
He said that due to the poor policies of the present government, around seven million workers have lost jobs so far, and if the situation continues, the entire industry would lead to shutdown, leading to complete ciaos.
Copyright Business Recorder, 2023