Pakistan’s garment exports have fallen 12.4 per cent in the 11 month period (July-May) from a year ago. Cutthroat competition with countries like Vietnam, Bangladesh and China, is giving a tough time to exporters. While the minimum wage is around $68 in Bangladesh, in Pakistan it is $125 and still rising. While Pakistan gives exporters a four per cent rebate on an incremental basis, countries like Bangladesh go all the way.
Pakistan has witnessed 12 per cent decline in cotton cultivation this year as compared to last year. Pakistan is importing extra long staple cotton from the United States and some other countries. India gives subsidies on export of all surplus commodities which is not available to farming community in Pakistan. Due to massive subsidies on export of surplus commodities cotton in India, is cheaper in India than Pakistan.
To boost exports, Pakistan is contemplating a zero rated sales tax policy for five of its export sectors i.e. value-added textiles, carpets, surgical, sports goods and leather. Out of 4,00,000 cotton bales available in the country, 64,000 are with the Trading Cooperation of Pakistan and the rest with growers and other agencies.