KARACHI: After a continuous fall for two years, the leather industry believes the country’s exports will first stabilise this year and show growth in the next after the announcement of the incentive package worth Rs180 billion.
On Tuesday, the federal government announced incentives for a period of 18 months to support the declining exports of the country.
“We hope that the leather exports will start showing growth from the next month,” former chairman of the Pakistan Tanners Association (PTA), Gulzar Feroz, told The Express Tribune.
Leather exports of Pakistan have declined since the last two years mainly due to economic slowdown in western markets, especially in Europe.
Industrialists are unclear right now about the procedure of disbursements to the exporters. The government will provide 7% rebate to exporters on all leather made-ups, including garments to promote value-addition in the sector.
Overall leather exports in Pakistan declined to $977 million in 2015-16, down 18.27% from $1.19 billion in 2014-15, according to the PTA. In 2014-15, leather exports already declined by 6.4% compared with 2013-14.
The government package is based on cash support and waiver in import duties and taxes for five ‘export-oriented’ sectors, including textile, leather, sports goods, surgical equipment and carpets.
Due to the sheer size of textile industry in Pakistan’s exports, analysts say up over 85% cash support of the package will go to the textile while the rest will be divided in the remaining four sectors.
Published in The Express Tribune, January 12th, 2017.