Leather industry seeks government support

Sends alarm signals as exports decline 14%.

Ppi June 26, 2014

KARACHI: Pakistan Tanners Association’s Standing Committee on Gas and Infrastructure Chairman Usman Umer apprised the government of the declining leather exports, and warned that if the situation persisted, the Indian competitors would snatch further market of Pakistan’s leather goods.

Criticising the government’s industry policies, he said that the present government, instead of offering incentives to the ailing industry, is unnecessarily overburdening it by levying unethical and unpractical taxes like Gas Infrastructure Development Cess (GIDC), causing more uncertainty for exports-oriented industry in future.

He said that the leather exports have declined by more than 14% during the last five years from $1.22 billion in fiscal year 2007-08 to $1billion in 2012-13, due to energy crisis, load-shedding and gas shortage.

“Leather processing is a continuous process and frequent power cuts have an adverse effect on leather and its quality. Due to this energy crisis and government’s decision to levy Rs 150 mmbtu cess on gas, the second largest export sector is facing stagnation for the last 5 years.

He pointed out that because of these reasons India’s exports picked up since May 2014 by 14%. India, by virtue of many incentives, including cheap gas, electricity and duty and tax rebates has doubled its leather exports to over $28 billion in just a few years.

While sending an SOS to government, he said that with the recent appreciation of Pak rupee, the leather industry is having difficulty in competing with global markets. He demanded that the exported be exempted from the levy of GIDC, in particular the leather industry, which has potential to contribute higher foreign exchange earnings, and help recover the economy from the current financial crisis. 

Published in The Express Tribune, June 27th, 2014.

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p r sharma | 7 years ago | Reply

The actual reasons of shortfall in leather export be ascertained and efforts be made for value addition without which export will remain stagnant even decline.

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