Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) chief coordinator, Ijaz A Khokhar urged the prime minister to intervene and frame a policy for a reduction in input costs, otherwise industrial units would not only close down, but millions of workers would also lose their jobs. The government need to address the problems of the value-added textile industry sector on an urgent basis as there is a sharp drop seen in the current exports of textile and clothing during the first four month this year which may widen further in the next quarter.
The prime minister had committed to hold meeting with the export-oriented industries on a quarterly basis but no such meetings have taken place so far, Khokhar said.
On a monthly basis, exports dropped 10.63 per cent to 1.051 billion US dollar in October compared to 1.176 billion US dollar in the same month last year. This is because of the fact that the value-added textile sector is burdened with multiple taxes with high cost of inputs, tariffs of gas, electricity, raw material, etc, and is further harassed due to short supply of all these most essential utilities.
The government has increased the sales tax from two per cent to three per cent in the budget, which led to piling up of exporter’s refunds with the tax department. The government has also imposed 10 per cent regulatory duty on yarn imports from India, mostly used by knitwear and woven apparel segments, to further increase the cost of doing business. Thus, price of domestically produced yarn increased manifold.
According to Pakistan Knitwear and Sweater Exporters Association North Zone chairman, Shahzad Azam Khan, observation the country will face a drastic decline in its export following the attacks on France. The exports have dropped by 10.63 pre cent to 1.051 billion US dollar monthly in October 2015 from 1.176 billion US dollar in the same month last year inspite of GSP plus status granted to Pakistan.
