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Decline in cotton production hits Pakistan’s textile export

Shaikh Mohammad Shafiq, Central Chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) laments the sorry state of the country’s textile and apparel industry. He says, in the last financial year, Pakistan’s textile export slid by $1 billion due to a substantial decline in cotton production. On the other hand, imports increased 6 per cent in July this year as a result the government could not achieve exports targets. Poor policies have brought Pakistan’s most valuable sector on the verge of collapse, he points out. Export of readymade garments, however, showed a positive sign as it climbed to $2.196 billion in July-June (FY 16) from $2.095 billion recorded in the same period last year thus showing an increase of 4.83 per cent.

Shafiq regretted that the value added industry is already suffering with low productivity due to shortage of cotton, high energy cost, and discriminating import duties on the industry's raw material. The PRGMEA chairman said regional comparison of cost of doing business shows that Pakistan’s wages, interest rates, electricity, gas and water tariff are much higher and that seems to have created hurdles for smooth business. In the Budget for 2016-17, the Finance Ministry gave some incentives and zero-rated sales tax to top five important textile sectors to enhance their exports in the next two years. He also committed that refunds cases having release payments orders (RPOs) up to April 30, 2016 will get payment by August 31, this year but did not mention about the fate of remaining cases.

Shafiq concluded that the textile industry would remain unviable in case the government failed to return local taxes and levies on exports.

 
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