Pakistan Hosiery Manufacturers Association (PHMA) leadership has vowed that the value-added textile industry will work closely with the new government in a bid to enhance exports and rejuvenate the growth momentum.
In a statement, PHMA Zonal Chairman Farrukh Iqbal asked the government to provide its backing for the value-added apparel sector, so that it could utilise its potential to reap benefits of the GSP Plus preferential trade facility and provide mass employment to the jobless population. “Exports to EU countries have started dropping, which is a matter of grave concern,” he said. Iqbal hailed the recent government move to release Rs65 billion worth of verified pending tax refunds of exporters until February 2024. “This is a welcome move from Prime Minister Shehbaz Sharif and we appreciate him along with his team, as this will definitely boost the confidence of exporters and encourage the export sector.”
He expressed hope that the same spirit would be followed for the release of the remaining refunds of deferred sales tax and under schemes like Duty Drawback of Taxes and Drawback of Local Taxes and Levies, the Technology Up-gradation Fund and markup subsidy in order to raise exports. As energy prices had escalated to record highs, the PHMA leader pointed out that frequent hikes in gas and power tariffs would further stoke inflation, amidst high markup, making Pakistani value-added textile products uncompetitive in the international market.
He termed the increase in energy tariffs an unwise move that would sabotage the efforts of exporters. He asked the new government to ensure a level-playing field by offering regionally competitive energy tariffs and continuing the DLTL scheme, as committed in the new five-year textile and apparel policy. Iqbal was of the view that energy rates for industries should be brought at par or below tariffs prevailing in the competing regional countries.
Pakistan needs an even playing field with regional competitors through the continuation of previous concessionary energy tariffs for the export industry. Pointing to the fall in exports to the EU, the PHMA zonal chairman said that Pakistan’s exports to European nations dipped 7.54% year-on-year in the first seven months of the current fiscal year, primarily due to reduced demand for Pakistani goods in western, southern and northern Europe.
Export proceeds from those countries dropped to $4.866 billion in July-January FY24, against shipments of $5.263 billion recorded in the corresponding period of the previous year, according to figures compiled by the State Bank of Pakistan. This decline in export earnings indicates the challenges faced by Pakistani exporters in these uncertain economic times despite having preferential trade access to the 27-member EU bloc.
