Textile industry responsible for its dismal state: commerce secretary
Dagha says sector has ignored innovation which has led to decline in exports
A textile mill. PHOTO: AFP
KARACHI:
The textile industry is itself responsible for the continuous decline in exports because it has ignored innovation, Commerce Secretary Mohammad Younus Dagha said on Wednesday.
His remark comes after years of criticism hurled back and forth between the government and the industry with Pakistan continuing to suffer through falling exports.
“With this attitude, you (the textile industry) cannot compete with Bangladesh and India that have increased their exports despite challenges,” said Dagha while talking to representatives of value-added textile associations at the Pakistan Hosiery Manufacturers Association (PHMA) House.
A tale of two textile cities — one in China and one in Pakistan
He said that the textile industry was completely dependent on the government, adding, “The government cannot do everything for you.”
In reply to a question, the federal secretary accepted that the government needs to update its policies so that all major crops like cotton, rice, wheat and sugarcane get appropriate share in the total cultivation area.
Dagha said that the Ministry of Commerce was aware of the benefits of European Union’s (EU) GSP Plus scheme for Pakistan. Therefore, the government is taking all important diplomats and trade representatives in Europe on board to protect Pakistan’s interests in the EU to ensure the country continues to enjoy tax benefits under the scheme.
When asked how much the government has disbursed under the new textile package, he said the government has given Rs25-30 billion to the textile exporters in the year ended on June 2017.
Moreover, the government may release about Rs70-80 billion in the current fiscal year. Out of these total funds, he added, two thirds will be in the form of cash while the remaining in other forms like reducing power tariffs etc.
Challenging the minister’s comments, Karachi Chamber of Commerce and Industry (KCCI) former president Zubair Motiwala said that the government’s role is still very important in supporting exports.
He added that the success India has achieved in increasing its cotton output was assisted by their government, so ours needs to keep this in mind.
For over 25 years, Pakistan’s cotton production has been stagnant. For instance, the country produced 11.5 million bales of cotton in 1991, which has reduced to 10.7 million bales in 2017, down 7%. On the other hand, India’s cotton production has increased by 220% from 10.6 million bales to 34 million bales in the same period.
‘Govt responsible for decline in textile exports’
Similarly, Pakistan is lagging far behind its main competitors in the region. Pakistan’s total textile exports were $3.67 billion in 1990 that rose to $12.45 billion in 2017, up 239%. However, India’s textile exports rose by 677% from $4.71 billion to $36.63 billion.
Bangladesh’s growth in textiles has also been exponential in the same period. The tiny country that does not have any significant local cotton production increased its textile exports from just $0.98 billion in 1990 to $30.24 billion in 2017, up almost 30 times.
The representatives of value-added textile associations reiterated that the government needs to bring down electricity and gas tariffs otherwise the country would not be able to increase its exports.
The government has promised to reduce industrial tariffs gradually in coming months, but the industrialists are demanding an immediate cut of Rs3 per unit to support the export-oriented industries in the country.
Last year, Pakistan exported textile goods worth $12.45 billion, which is 61% of the total exports of $20.44 billion.
Published in The Express Tribune, September 7th, 2017.
The textile industry is itself responsible for the continuous decline in exports because it has ignored innovation, Commerce Secretary Mohammad Younus Dagha said on Wednesday.
His remark comes after years of criticism hurled back and forth between the government and the industry with Pakistan continuing to suffer through falling exports.
“With this attitude, you (the textile industry) cannot compete with Bangladesh and India that have increased their exports despite challenges,” said Dagha while talking to representatives of value-added textile associations at the Pakistan Hosiery Manufacturers Association (PHMA) House.
A tale of two textile cities — one in China and one in Pakistan
He said that the textile industry was completely dependent on the government, adding, “The government cannot do everything for you.”
In reply to a question, the federal secretary accepted that the government needs to update its policies so that all major crops like cotton, rice, wheat and sugarcane get appropriate share in the total cultivation area.
Dagha said that the Ministry of Commerce was aware of the benefits of European Union’s (EU) GSP Plus scheme for Pakistan. Therefore, the government is taking all important diplomats and trade representatives in Europe on board to protect Pakistan’s interests in the EU to ensure the country continues to enjoy tax benefits under the scheme.
When asked how much the government has disbursed under the new textile package, he said the government has given Rs25-30 billion to the textile exporters in the year ended on June 2017.
Moreover, the government may release about Rs70-80 billion in the current fiscal year. Out of these total funds, he added, two thirds will be in the form of cash while the remaining in other forms like reducing power tariffs etc.
Challenging the minister’s comments, Karachi Chamber of Commerce and Industry (KCCI) former president Zubair Motiwala said that the government’s role is still very important in supporting exports.
He added that the success India has achieved in increasing its cotton output was assisted by their government, so ours needs to keep this in mind.
For over 25 years, Pakistan’s cotton production has been stagnant. For instance, the country produced 11.5 million bales of cotton in 1991, which has reduced to 10.7 million bales in 2017, down 7%. On the other hand, India’s cotton production has increased by 220% from 10.6 million bales to 34 million bales in the same period.
‘Govt responsible for decline in textile exports’
Similarly, Pakistan is lagging far behind its main competitors in the region. Pakistan’s total textile exports were $3.67 billion in 1990 that rose to $12.45 billion in 2017, up 239%. However, India’s textile exports rose by 677% from $4.71 billion to $36.63 billion.
Bangladesh’s growth in textiles has also been exponential in the same period. The tiny country that does not have any significant local cotton production increased its textile exports from just $0.98 billion in 1990 to $30.24 billion in 2017, up almost 30 times.
The representatives of value-added textile associations reiterated that the government needs to bring down electricity and gas tariffs otherwise the country would not be able to increase its exports.
The government has promised to reduce industrial tariffs gradually in coming months, but the industrialists are demanding an immediate cut of Rs3 per unit to support the export-oriented industries in the country.
Last year, Pakistan exported textile goods worth $12.45 billion, which is 61% of the total exports of $20.44 billion.
Published in The Express Tribune, September 7th, 2017.