LAHORE
The government has shelved its decision of initiating investigations to find out reasons behind decline in exports of the textile industry, which went down despite the fact that the sector had been enjoying cheaper electricity and gas, it is learnt.
Finance ministry sources told Pakistan Today that the decision of investigation got backlash after the All Pakistan Textile Mills Association (APTMA) strike call.
The investigation was to spotlight actual consumption of cotton yarn by the textile mills.
Finance Minister Ishaq Dar suggested detailed analysis of data to find out the actual reasons and factors responsible for the drop in exports. He was of the view that decline in the export of cotton cloth was not justified and called for investigating the matter in order to determine the actual consumption of cotton yarn.
Meanwhile, APTMA announced to stage a rare protest in front of the parliament house on 7th July against the government’s alleged ‘anti-industry’ polices.
The textile industry was of the view that it has been suffering since the past three years due to rising cost pressures, rupee weakness and liquidity issues arising due to FBR’s non-payment of refunds.
Industry associations/leaders have time and again placed demands to the government for reduction in price of gas to Rs 400/mmbtu, reduction in electricity tariff, releases of stuck up refunds, moderation in minimum wage increases and adoption of export friendly exchange rate regime.
Although government has met some demands of exporters such as announcing zero rated sales tax regimes for textile sector, yet this has not been enough to arrest declining exports as evident by cumulative 11 per cent drop in textile exports from fiscal 2014 to June 2017.
The industry was of the view that budget of fiscal 2018 did not contain any major new incentives for the textile sector.
Sources said that government officials took up the matter with the textile industry and pressed the industrialists to step up exports, particularly in view of the recently announced package that offered cheaper electricity and gas.
Drop in exports was witnessed in both value-added negative 13 per cent and non-value added segments as negative 11 per cent had been tagged on the 10-day long strike by goods transporters in Karachi during “The month of May is partially responsible for the precipitous drop in export”, sources said.
They said that weakening global commodity prices, shift in demand patterns in leading markets, exchange rate issues and slowdown in Chinese economic growth were also cited as factors that primarily contributed to the decline in exports.
Lack of trade facilitation like the burden of regulations, manual customs procedures and inadequate port infrastructure also played their role in weakening exports of Pakistan.
Supply-side issues such as energy shortage and its cost, outdated technology, lack of standardisation and compliance and market-related matters like market concentration, constraints in regional markets and non-tariff barriers in India and Iran were other major factors for the drop in exports from Pakistan.
