ECC likely to approve five-year textile, apparel policy today

LAHORE: A meeting of the Economic Coordination Committee (ECC) of the Cabinet to be held today is expected to discuss and approve the Textile and Apparel Policy 2020-25.

The meeting which will be presided over by Federal Minister for Finance & Revenue, Dr Abdul Hafeez Shaikh, will have six items on the agenda from different ministries, including a proposal by the moved by Ministry of Industries and Production for a waiver of taxes on the import of sugar.

Earlier on December 17, the Ministry of Commerce, after revising the initial draft, had submitted the Textile Policy 2020-25 to the ECC for approval.

Prime Minister Imran Khan had approved the five-year textile policy for onward submission to the ECC in November 2020. However, the ministry was unable to oblige due to undisclosed reasons.

According to sources, the draft policy, prepared by the textile division of the ministry, would now be discussed in the upcoming meetings of ECC.

Under the new draft of the five-year textile policy, the target of textile exports by 2025 has been set at $21 billion. The division also recommended provision of electricity to the sector at 7.5/kWh cents; RLNG at $6.5 per mmBtu; and domestic gas at Rs786 per mmBtu.

Other incentives in the proposed policy include unchanged Long-Term Financing Facility (LTFF) and Export Financing Scheme (EFS) rates; review of LTFF and refinance scheme for SMEs and indirect exporters; and launch of Brand Development Fund.

The proposed policy has been formulated to reduce the input cost of the textile and clothing sector and to make it competitive with regional players, documents read.

Under the policy, facilities/incentives worth around Rs950 billion would be provided to the textile sector. The impact of electricity at cents 7.5/kWh (all inclusive) is estimated to be Rs250 billion; RLNG — Rs111 billion; DLTL for textiles and apparel products — Rs400 billion; 5pc LTFF — Rs75 billion; and 3pc EFS — Rs109 billion.

Of the $21 billion target, $16.294 billion has been set for value added sector while $4.571 billion for the textile sector.

According to the draft policy, customs duty drawback rates would be revised, as the government is committed to revitalising Pakistan Textile City Limited and Karachi Garment City Limited.

In addition, mass level training programmes would be launched, especially on industrial stitching, whereas textile marketing strategy would be reviewed.