According to the All PakistanTextileMills Association (APTMA), the country’s textile exports can be doubled in the next five years if the government creates a congenial environment for the industry. Tariq Saud, the newly elected president of the representative body, says that the textile industry is set to receive $1 billion annual investment provided the government comes up with special incentives and facilitations.He said that the spinning industry is designed to operate round the clock, but is currently operating at 66 percent of its installed capacity.At least 15 well-established spinning mills have been closed down after exhausting all their resources and others are on the verge of collapse as the cost production has increased manifold. The industry needs a package of incentives without which it will not be able to continue its operations. The exports are universally zero-rated, but are subjected to various taxes and levies in Pakistan that have reached five percent of the export value.
Earlier on several occasions, Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar had hinted at announcing a relief package, butit is inordinately delayed. The textile sector needs cheap electricity as the current power tariff is too high to do any good to lower the cost of production and enhance exports whereas the industrialists demand zero rating. According to the APTMA official, the revival of the textile sector will remain a distant dream without reducing power tariff to Rs9 per unit. A delay in the package is also impeding the creation of job opportunities in the textile industry.
As a matter of fact, the government should come clear on its policies toward the textile industry which is one of the biggest employment sectors all over the world.The country is creating joblessness in textile sector at a fast rate due to low sale of yarn in local market, but India is adding new jobs in textile sector due to usage of local yarn in the local market.
The government earns billions of rupees foreign exchange through textile exports, but is not ready to announce incentives for the exporters. The exporters in India, China and Bangladesh are being givenrebate on textile exports, but various types of taxes paid by the exporters are not refunded in Pakistan. In India, the textile exporters are being given facilities beyond normal rebates on textile exports to 94 countries, including Pakistan. As a result, the Indian exporters are dumping their products in Pakistan and the Indian government is protecting its spinning industry by levying duties on the import of yarn.
