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ISLAMABAD: In a mammoth blow to exports, Pakistan has lost its textile export share in global market by 23 percent from 2.2 percent to 1.7 percent raising questions on economic and trade policies of government functionaries, unfolds the latest presentation on restoration of viability and growth of textile industry prepared by Aptma.
“The investment in textile and clothing massively declined by 44 percent in 2016-17 on account of which, the country’s textile production capacity has got impaired by 30-35 percent owing to which 150 industrial units have become non-functional resulting in 30 percent unemployment. More shockingly, the textile industry of Pakistan lost 15 percent technological edge advantage over competitors.”
Following the non-performance of the textile sector on account of highest cost of doing business in the region, Pakistan is now facing the highest ever trade deficit of $35.609 billion and external deficit has swelled to $16.305 billion. The Aptma presentation also mentions as to how the other competitive countries have performed far more better than Pakistan showing that Vietnam is the country that ranked first showing 107 percent in growth in textile and clothing exports followed by Bangladesh with growth of 64 percent in exports of the said items, India with 31 percent, Sri Lanka 20 percent growth whereas Pakistan stayed in the red zone with negative growth of 11 percent.
Aptma also came down heavily on the government saying that the bilateral trade agreements meaning by that free trade agreements (FTAs) finalized with various countries are faulty and failed to provide the level playing field to the real stake holders, export- oriented industrial sector. The country's perception stagmatised with law and order situation owing to which the militants activities has resulted in barring the investors from traveling to Pakistan through travel adviseries. Though the situation has improved on account of military operations against militants, but there is a need to launch the drive on part of the government to change the country’s perception so that the existing reluctance between the buyers and investors.
The presentation also reveals that prime minister’s export led growth package has got reversed as despite the shortage of cotton-- 3.8 million bales, 4 percent customs duty and 5 percent sales tax has been re-imposed. It also mentions that energy cost is more than 30 percent of the total conversion cost in spinning, weaving and processing industries. And the industrial gas tariff of Pakistan is 100 percent whereas electricity tariff is 50 percent higher than the regional competitors. More importantly, gas is burdened with various add-ons, including (GIDC, UFG and cost of supply) and textile industry cannot pass system inefficiencies to its international buyers.
Aptma Chairman Aamir Fayyaz, while talking to this scribe, demanded zero rating of raw materials for the textile industry, reducing cost of doing business, resolving the liquidity problems and filling up the policy-implementation dividing immediately to ensure restoration of the industry’s viability and revival of the export potential of the country.
Fayyaz said the high cost of doing business, shortage of liquidity, the ongoing policy-implementation divide and realisation of only Rs03 billion out of Rs180 billion textile package are a few major concerns of the industry at present.
He added that the viability of the textile industry has been eroded fast but the government was not able to pay required amount of attention to it. He pointed out that the production capacity worth $4 billion has been closed down all across the textile value chain, besides an potential $12 billion exports through conversion of basic textile into the value added garments.
He said both the earliest revival and growth of textile industry is a must to steer the industry out of a bad shape and contribute to the exports of the country. He capsuled the dreadful state of affairs in the industry by stating that the production capacity has been impaired by 35 percent across the textile value chain. Textile exports have declined by 11 percent, its global market share has reduced by 23 percent, investment in the sector has dropped by 17 percent and 30 percent of the unemployment has already been redundant.
He also pointed out that growth of textile and clothing exports are in negative zone in Pakistan against an exponential growth recorded in the competing countries during 2011 to 2017.
He said the energy cost of industry in Pakistan is highest in the region that has reached to 30 percent of the cost in spinning, weaving and processing sectors. Both electricity and gas tariff are higher by 30 and 60 percent respectively in the region. Meanwhile, an additional burden of Rs3.63 surcharges of various nature has crippled the industry, and it is unable to pass on this cost to the international buyers, he added.
Seeking revival-and-growth-focused measures to enable this industry to increase production, employment and exports in the larger economic interest, he has demanded full realisation of Rs180 billion textile package announced by the prime minister in January this year, duty/tax free import of cotton and polyester staple fiber, liquidation of all outstanding refunds of sales tax, withdrawal of all electricity surcharges, supply of RLNG at Rs400/MMBTU and strengthening of domestic commerce through tariff/non-affiliated measures to counter informal trade and dumped imports.
https://www.thenews.com.pk/print/217913-Pakistan-loses-textile-export-share-in-world-market-by-23pc
“The investment in textile and clothing massively declined by 44 percent in 2016-17 on account of which, the country’s textile production capacity has got impaired by 30-35 percent owing to which 150 industrial units have become non-functional resulting in 30 percent unemployment. More shockingly, the textile industry of Pakistan lost 15 percent technological edge advantage over competitors.”
Following the non-performance of the textile sector on account of highest cost of doing business in the region, Pakistan is now facing the highest ever trade deficit of $35.609 billion and external deficit has swelled to $16.305 billion. The Aptma presentation also mentions as to how the other competitive countries have performed far more better than Pakistan showing that Vietnam is the country that ranked first showing 107 percent in growth in textile and clothing exports followed by Bangladesh with growth of 64 percent in exports of the said items, India with 31 percent, Sri Lanka 20 percent growth whereas Pakistan stayed in the red zone with negative growth of 11 percent.
Aptma also came down heavily on the government saying that the bilateral trade agreements meaning by that free trade agreements (FTAs) finalized with various countries are faulty and failed to provide the level playing field to the real stake holders, export- oriented industrial sector. The country's perception stagmatised with law and order situation owing to which the militants activities has resulted in barring the investors from traveling to Pakistan through travel adviseries. Though the situation has improved on account of military operations against militants, but there is a need to launch the drive on part of the government to change the country’s perception so that the existing reluctance between the buyers and investors.
The presentation also reveals that prime minister’s export led growth package has got reversed as despite the shortage of cotton-- 3.8 million bales, 4 percent customs duty and 5 percent sales tax has been re-imposed. It also mentions that energy cost is more than 30 percent of the total conversion cost in spinning, weaving and processing industries. And the industrial gas tariff of Pakistan is 100 percent whereas electricity tariff is 50 percent higher than the regional competitors. More importantly, gas is burdened with various add-ons, including (GIDC, UFG and cost of supply) and textile industry cannot pass system inefficiencies to its international buyers.
Aptma Chairman Aamir Fayyaz, while talking to this scribe, demanded zero rating of raw materials for the textile industry, reducing cost of doing business, resolving the liquidity problems and filling up the policy-implementation dividing immediately to ensure restoration of the industry’s viability and revival of the export potential of the country.
Fayyaz said the high cost of doing business, shortage of liquidity, the ongoing policy-implementation divide and realisation of only Rs03 billion out of Rs180 billion textile package are a few major concerns of the industry at present.
He added that the viability of the textile industry has been eroded fast but the government was not able to pay required amount of attention to it. He pointed out that the production capacity worth $4 billion has been closed down all across the textile value chain, besides an potential $12 billion exports through conversion of basic textile into the value added garments.
He said both the earliest revival and growth of textile industry is a must to steer the industry out of a bad shape and contribute to the exports of the country. He capsuled the dreadful state of affairs in the industry by stating that the production capacity has been impaired by 35 percent across the textile value chain. Textile exports have declined by 11 percent, its global market share has reduced by 23 percent, investment in the sector has dropped by 17 percent and 30 percent of the unemployment has already been redundant.
He also pointed out that growth of textile and clothing exports are in negative zone in Pakistan against an exponential growth recorded in the competing countries during 2011 to 2017.
He said the energy cost of industry in Pakistan is highest in the region that has reached to 30 percent of the cost in spinning, weaving and processing sectors. Both electricity and gas tariff are higher by 30 and 60 percent respectively in the region. Meanwhile, an additional burden of Rs3.63 surcharges of various nature has crippled the industry, and it is unable to pass on this cost to the international buyers, he added.
Seeking revival-and-growth-focused measures to enable this industry to increase production, employment and exports in the larger economic interest, he has demanded full realisation of Rs180 billion textile package announced by the prime minister in January this year, duty/tax free import of cotton and polyester staple fiber, liquidation of all outstanding refunds of sales tax, withdrawal of all electricity surcharges, supply of RLNG at Rs400/MMBTU and strengthening of domestic commerce through tariff/non-affiliated measures to counter informal trade and dumped imports.
https://www.thenews.com.pk/print/217913-Pakistan-loses-textile-export-share-in-world-market-by-23pc
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