Overseas shipments: Exports crushed by high costs

Drop in exports reflects govt’s reluctance to consult industry

KARACHI: The government needs to look into the reasons for a 13.42% decline in exports in the first four months of fiscal year 2015-16, said Pakistan Apparel Forum Chairman and Value Added Textile Forum Chief Coordinator Muhammad Jawed Bilwani.

Pakistan’s overall exports during July-October declined by 13.42% compared to the same period of last fiscal year. Whereas, exports of major competitors, Bangladesh and Vietnam, rose 4.95% and 9.20% respectively, Bilwani said in a statement issued on Monday.

During this period, exports of China and Sri Lanka decreased negligibly by 2.50% and 4.50% respectively.

These figures point out that the government is not consulting the industry representatives, he added. In the last fiscal year 2014-15, overall exports had also declined by approximately 5%.

Bilwani asserted that the major reason for the persistent decline in exports is the high cost of inputs - tariff of gas, electricity, water and raw material prices - in comparison to the neighbouring countries.

Moreover, sales tax refunds, customs rebates and other claims blocked by the government are also causing a major liquidity crunch.

He said at the end of the PPP tenure, it imposed 2% sales tax on exports, which was then strongly opposed by the PML-N. However, after coming to power, instead of withdrawing the tax, the PML-N government increased the tax rate on exports by 50% in the budget for 2015-16.

Published in The Express Tribune, November 17^th, 2015.

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