Business experts have expressed the apprehensions that the leather industry of the country would not be able to reap full benefit of a duty-free access to the European Union market under Generalized System of Preferences (GSP) unless the government resolves long time issues.They say that the government should refund stuck-up claims, resolves energy crisisand ban the export off livestockfrom the country.Pakistan Tanners Association South ZoneChairman Hamid Zahoor particularly opposes the export of livestock, saying that the exports of theleather products have remained stagnant at $1.22 billion for the last six years despite the fact that the country has the huge potential of leather exports.He says that a bit of support from the Ministry of Commerce can push exports to $3 billion in three years and make the industry the second biggest after textile industry in the country.
The chairman has sent his proposals for trade policy as well as budget 2015-16to the Federal Board of Revenue and has demanded the government also curb massive smuggling through the borders in the garb of export. Endorsing the PTA’s budget proposals, he hasasked the government to include hides and skins in 6th Schedule of theSales Tax Act 1990, besides reducing custom duty on basic leather chemicals. The PTA chief also requested the Trade Development Authority of Pakistan to make strong recommendation for inclusion of the PTA’s proposal for the budget and trade policy for the year 2015-16.He has also demanded the release of pending Sales Tax claims of the PTA’s members, saying that a significant ratio of working capital of leather exporters has been stuck-up in refund regime at a time when the leather export has already declined by over 17 percent during the last six years from $1.22 billion in Financial Year 2007-08 to $1.01 billion in 2012-13 and even down to five percent in 2014-15.
The growth rate of leather sector exports is in minus and exports have reduced to 14 percent as against positive growth in the region with 47 percent, 40 percent, and 102 percent in China, India and Bangladesh, respectively during the last fiscal year.As a matter of fact, exports potential of leather sector is huge in Pakistan as a meat-eating nation. A best point in favour of Pakistan is that the Pakistani products are made of Halal skin which is doubtful in case of India and China.
