ISLAMABAD: The Ministry of Commerce, after revising the initial draft, has finally submitted the Textile Policy 2020-25 to the Economic Coordination Committee (ECC) of the Cabinet for approval.
Prime Minister Imran Khan had last month approved the five-year textile policy for onward submission to the ECC. 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 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 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.
It may be noted that the country’s first ever e-commerce policy is under implementation phase, which would provide an open access to textiles and apparel manufacturers/exporters to tap available business opportunities across the globe. Amazon has already started registering Pakistan manufacturers and exporters, including textile millers.
As per the draft textile policy, the government would offer incentives for international buying offices opening their offices in the country. “Incentives will be offered to encourage women employment in the textile and garment sectors. Moreover, labor laws will also be reviewed to facilitate women’s entry into the job markets,” the document read.
