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Pakistan textile and clothing exports falls in July-May

During the first 11 months of the current fiscal year Pakistan’s textile and clothing exports fell 1.98 per cent year-on-year to $11.234 billion mainly due to lower proceeds from raw material and low value-added products, such as cotton yarn and fabrics.

The decline in export proceeds was also evident in rupee terms during the July-May period of 2016-17.On a month-on-month basis, the export proceeds fell 12.24pc in May negating the government’s claim of reviving the growth in the sector despite offering huge subsidies.Overall export proceeds in July-May were down 3.13pc to $18.540bn.

Product-wise details show exports of ready-made garments rose 4.15pc while those of knitwear dropped 1.85pc in July-May. In primary commodities, exports of cotton yarn witnessed a year-on-year decline of 3.64pc while those of cotton cloth and yarn dropped 5.81pc and 27.32pc, respectively.

Exports of raw cotton also recorded a year-on-year decline of 47.14pc and made-up articles grew 52.85pc. Proceeds from textile exports declined 33pc while the preferential access to the European Union under the GSP+ scheme hasn’t boosted proceeds due to a slump in demand.

From Jan 15, the government has not only increased the rebate to 7pc for readymade garments, but also allowed cash support of 4pc on yarn and grey cloth under the Rs180bn package announced by the prime minister. Also an amount of Rs12.5bn was the annual allocation for drawbacks on export of non-textile value added sectors.

Spinning and ginning sector have been included in the long term financing facility. The export finance rate is currently at 3pc, which is the lowest in a decade.The duty free import of textile machinery was continued for fiscal year 2015-16. The sales tax zero-rating regime for the five export sector was continued in the fiscal year 2017-18.

 
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