KARACHI: Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) Chairman Atif Ashraf said on Saturday that exports of Pakistan’s leather garment industry are on a continuous decline while the government has no clue of the challenging situation.
“Our exports are declining at a time when regional competitors are gaining strength in different markets,” Ashraf said in a statement.
He said the leather garment industry of Pakistan was in distress and was about to collapse if the government did not come forward to bail it out by offering incentives.
“Ours is a high value-added industry and it is the second largest value-added export sector of Pakistan after textiles,” he said.
Pakistan’s leather garment exports dropped 12.35% during fiscal year 2015-16 compared to 2014-15, according to the Pakistan Bureau of Statistics, which appeared to be alarming as the industry was facing the spectre of closure.
Unless the government announced a relief package for the industry, the exporters would be forced to shut down their units, which would cause unemployment among workers, Ashraf said.
He pointed out that Indian and Chinese governments had offered high rates of duty drawback to their exporters as an incentive for boosting exports. China offers 8.5% duty drawback on the export of leather garments and India offers 9.5%.
In Pakistan, the duty drawback rate is 4.26% for leather jackets. This facility was given when there were no taxes at the import stage on raw skin, pickle and wet blue. Now, the government charges 3% customs duty and 1% withholding tax, but the duty drawback rate has not been revised. Leather garment exporters import 60% to 70% of raw material for manufacturing different products.
Ashraf urged the prime minister and federal commerce minister to activate the Trade Development Authority of Pakistan (TDAP) and commercial counsellors in Pakistani missions abroad to help exporters in the international market so that Pakistan’s leather garment products could be marketed on a large scale.
Published in The Express Tribune, November 27th, 2016.