GSP Plus status will help Pakistan increase export to EU, FPCCI pushing value addition

The textile industry in Pakistan is getting ready to take advantage of the GSP Plus status granted by the European Union to the country. At two listed textile companies have made significant expansion to increase the production of yarn, the basic raw material of the value-added textile products. Textile manufacturers are eyeing the GSP Plus status to come in to effect from January 2014, which will potentially result in increased textile exports.

Faisal Spinning Mills has installed 6,000 spindles at its spinning unit in Nooriabad. The commercial production has started and the output has increased by around nine tons of yarn per day. Similarly, Blessed Textiles Limited has installed 12,000 spindles at its spinning unit in Sheikhupura. The commercial production will start soon and the output would be increased by 12 tons of yarn per day.

Pakistan currently account for two percent of the global textile trade, while low value-added items comprise more than 34 percent of its exports.

Experts expressed hope that the EU initiative will supplement the government’s efforts to revive economy, with the expectation that the implementation of the Single Delegated Act, Pakistan’s trade with EU will receive a substantial boost, particularly in the textile sector.

However, the Federation of Pakistan Chambers of Commerce and Industry believed that the country lags behind in value addition which is a reason behind unemployment and lower volume of exports. It has urged the government to make a detailed plan to stimulate value addition in textiles and other sectors to encourage exports and employment after award of GSP Plus.

FPCCI president Zubair Ahmad Malik while speaking to the business community said that textile sector should be a priority which contributes 8 per cent to GDP, 54pc to exports, 24pc of industrial value-added products, employs 40pc of urban labour and absorbs 40pc of bank credit.

Moreover, the sliding Pak rupee will help textile sector realise extra billions of dollars while hike in power prices and interest rates can threaten the exports.

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