Though the financial results of textile companies in Pakistan aren’t very encouraging, listed companies are looking to positive growth in earnings as they are witnessing the benefits of GSP+ status granted by EU. There has been a turnaround in stock prices of most companies with aggregate market capitalisation of the sector increasing to Rs 368 billion from Rs 274 billion less than four months ago.
GSP+ is a component of the EU Generalised Scheme of Preferences (GSP) for developing countries. It offers additional trade incentives to developing countries already benefitting from GSP to implement core international conventions on human and labour rights, sustainable development and good governance. The scheme grants duty reductions on exports to the EU on some 6,000 tariff lines.
Pakistan players have affirmed that now they are focusing on manufacturing value added products to meet rising demand and GSP+ approval has opened a window of opportunity for the textile sector. Many have shifted their trade from Far Eastern countries to the EU since it fetches better prices.
As per official data, the textile industry contributed 53 per cent to total exports of $24.6 billion in the financial year 2013. However, experts feel to take advantage of the GSP+ status, government needs to look into issues like power and gas, negatively impacting the textile and apparel sector.
Trade.ec.europa.eu
