Textile: Ministry seeks over Rs80b package to prop up exports

Under new policy, it will help develop skills, increase productivity and create 3m jobs

ISLAMABAD:

The Ministry of Textile Industry is making out a strong case for a financial package of over Rs80 billion in the new proposed five-year textile policy in an effort to give a 100% boost to exports and prop up the overall economy.

“Implementation of the policy needs a financial package of around Rs83 billion over a five-year period,” a source quoted the ministry as saying in a briefing to the Economic Coordination Committee (ECC) during a meeting on October 30. “This amount is less than half of what was requested in the previous textile policy.”

Under the policy for 2014-19, the ministry is eager to develop the skills of workers, achieve higher per capita productivity and help create 3 million jobs. It is also seeking to encourage the adoption of modern management practices for improving efficiency and reducing wastage.



“The textile sector will be made compliant especially with labour and environmental standards domestically and internationally, and it will be encouraged to double value addition from $1 billion per million bales to $2 billion,” the ministry said, adding it would help double textile exports from $13 billion to $26 billion.

The ministry said it would facilitate an additional investment of $5 billion in machinery and technology and improve the fibre and product mix, especially in the garment industry.

To achieve these goals, a comprehensive draft of the textile policy for 2014-19 had been prepared including key proposals to meet the targets.

It was also suggested in the ECC meeting that liabilities of around Rs47 billion in the previous textile policy that covered the period from 2009 to 2014 may also be paid in the next policy.

The Ministry of Textile Industry has adopted a multi-pronged strategy to push up exports and fully utilise the sector’s potential.

The main features of the new policy would be to lessen dependence on factor endowments that give comparative advantage, strengthen the ministry as a forward-looking organisation and increase the use of technologies for better competitiveness of the entire textile value chain.

According to the ministry, the textile policy is based on actionable plans to make the industry competitive and sustainable. The government will ensure that benefits of the policy are enjoyed across the country.

Textile is the most important manufacturing sector of the country and has the longest production chain with the potential of value addition at each stage of processing from cotton ginning and spinning to fabric-making, dyeing, finishing and production of garments and other products.

It is contributing nearly one-fourth of the industrial value addition, provides employment to about 40% of the industrial workforce and has a share of 8% in gross domestic product.

“Barring seasonal and cyclical fluctuations, textile products have an average share of about 55% in national exports,” the ministry said.

However, despite being the fourth largest producer and the third largest consumer of cotton globally, Pakistan’s comparative advantage has been linked with a host of factors such as legislation, tax policy, tariff structure, labour laws, access to quality inputs and timely allocation of resources.

The ministry is also in the process of reviewing the legislative framework that governs some segments of the textile value chain including laws required to ensure compliance with international protocols and labour conventions.

After detailed discussions, the ECC constituted a committee that would submit a revised draft of the textile policy by November 21.

Published in The Express Tribune, November 8^th, 2014.

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