According to the Pakistan Tanners Association, leather exports have dropped by 26 percent during the fiscal year 2015-16 while exports of apparel and clothing fell by 12.36 percent, leather gloves by 11.44 percent and footwear by 18.84 percent during the period. The statistics show that the output of leather industry dropped by 1.02 percent during the first three months of the previous fiscal year over the corresponding period a year ago. The tanners have expressed concern over the continuous fall in exports of leather goods but the government has failed to come up with a plan to save this industry. The government could not yet provide duty drawback rates and waive customs duty on the import of raw hides. Experts believe a zero-rating of local taxes on export in the form of drawback in local taxes and levies at five percent should be reimbursed through banks. They also call for inclusion of finished leather in SRO 415(I)/2015 to bring positive results in exports sector.
According to a report of the Pakistan Bureau of Statistics, export of tanned leather declined by 45 percent during the first four months of the previous fiscal year and the export of finished leather also declined by 11.36 percent. A decline in the export of leather products is a setback to small and medium enterprises while the cost of doing business has increased by 12 percent in a couple of years due to energy crisis, irrational taxes on the leather sector and economic depression in various developed economies. The small-medium organizations are the backbone of the economy and there is little share of the government in its development. However, it is in the interest of the economy to pay attention to this sector. Pakistan has golden opportunity to fill the vacuum left by India due to its internal issues. India has lost $6 billion exports during the last two years and it is the time Pakistan should avail this opportunity.
In Europe, the countries like Portugal, Romania and Slovakia have boosted their exports within the European Union due to low tax rates and low freight expenditures. In Asia, India, Bangladesh, Vietnam and Thailand are strong competitors of Pakistan, but the country has edge over them due to its geographical location and better quality of leather. Pakistan can also import raw hides from central Asian states and can earn foreign exchange by introducing modern technology in the industry. Pakistan has potentials to export leather products worth $ 3 billion annually provided it modernize its industry and gives it a preferential status to compete in the world market. Leather industry is one of the major earning sectors and sooner the government pays its attention to it the better.
