Textile millers demand incentive package

Say delay in package is affecting exports of the industry


Our Correspondent November 07, 2016
Textile industry was facing a crisis-like situation because the cost of doing business was 10% higher than regional competitors. PHOTO: FILE

KARACHI: All Pakistan Textile Mills Association (Aptma) Senior Vice Chairman Zahid Mazhar has urged Prime Minister Nawaz Sharif to announce a textile package for exporters without further delay in order to help increase exports, utilise idle capacity, create jobs and attract investments in the country.

He said total exports of the country had fallen from $25 billion in fiscal year 2013 to $20 billion in 2016, according to a press release. “The delay in the proposed incentive package is affecting exports of the textile sector,” said Mazhar.

In support of his argument, he said textile exports in September 2016 declined by 12.1% compared with September 2015, whereas textile exports from July 2015 to June 2016 had recorded about 7.5% decline over the corresponding period of 2014-15.

The textile industry was facing a crisis-like situation because the cost of doing business was 10% higher than regional competitors, he said.

Duties, taxes and surcharges on exports in Pakistan are more than 5%. He said in view of the decline in prices of oil and natural gas in the international market there was no justification for imposition of gas infrastructure development cess (GIDC).

Mazhar urged the government to remove GIDC from the entire textile chain to enable it to regain its competitive edge and market share. Moreover, the rate of electricity should be brought down to Rs7 per kilowatt-hour (kWh) and the rate of gas should be brought below Rs600 per million British thermal units (mmbtu) inclusive of all taxes, surcharges and cess.

The gas tariff in Bangladesh is $3 per mmbtu, in India it is $4.2 per mmbtu while in Vietnam it is $4.5 per mmbtu.

Mazhar said the prime minister should take ownership of exports and announce the textile package without any further delay.

Pakistan’s share in world textile and clothing exports of $718 billion has decreased from 2.2% in 2006 to 1.7% in 2015, whereas Bangladesh exports have increased to 4.25% from 1.90%, India 4.84% from 3.4%, Vietnam 3.88% from 1.25% and in the case of China to 34% from 27%.

Published in The Express Tribune, November 8th, 2016.

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