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Pakistan: Government grants Rs 29 bn bailout package to textile industry

The Pakistan Tehreek-e-Insaf (PTI) government has given another bailout package worth Rs29 billion to the textile tycoons by waiving taxes and duties on the import of cotton. The government is offering support to industrial barons, who have got billions of rupees worth of incentive packages. They are now receiving gas and electricity at discounted tariffs. The government also recently approved a Rs25-billion gas subsidy for five zero-rated export-focused industries where textile giants are the major beneficiaries.

Another support package for textile manufacturers has been announced by waiving 50 per cent of the outstanding Gas Infrastructure Development Cess (GIDC), which amounts to Rs 40 billion. The textile industry will pay a total of Rs80 billion in GIDC arrears. With the scrapping of taxes and duties on cotton import, the government would lose Rs 14.6 billion in customs duty, Rs 6.9 billion in additional customs duty and Rs7.7 billion in sales tax.

Despite getting such incentive packages, textile exports from Pakistan to the global market have not increased significantly as Bangladesh exporters are eating into the share of their Pakistani counterparts.