Pakistan value added textile exports likely to witness further decline

Pakistani value added textile exports have witnessed declined by 13.42 percent in the first quarter of the current fiscal year due to increasing cost of doing business besides increasing electricity and gas charges.

Further, instead of withdrawing 2 percent sales tax on exports, the government has increased sales tax on exports by 50 percent in the last budget 2015-16. If the sales tax imposed on the exports is not withdrawn the value added textile exports would further decline by approximately 20 percent.

Pakistan Apparel Forum Chairman Jawed Bilwani questioned that the government was unable to refund sales tax claims, how can it pay back the claims after increasing it by 50 percent. He said that such policies are seriously impacting the value added textile export sector and not the spinning sector.

He further said that according to official figures of Pakistan Bureau of Statistics, the overall exports during July to October declined by 13.42 percent as compared to the corresponding year. During the same period, the overall exports of Bangladesh increased by 4.95 percent and Vietnam 9.20 percent, whereas the overall exports of China and Sri Lanka decreased negligibly by 2.50 percent and 4.50 percent respectively.

These figures clearly prove that the government is consulting only with those whose agenda is to decrease exports on account of their personal gains. In the last fiscal year 2014-15, overall exports also declined by around 5 percent.

The government need to understand that until and unless the major causes are not addressed and if value added textile sector is not supported and their grievances in terms of cost of doing business/manufacturing are not evaluated in comparison with regional competing countries, their exports would never increase.

The prime minister and finance minister has been urged to invite value added textile sector for threadbare deliberations to ascertain the causes of this depressing situation, adding that it is imperative that cost of all essential utilities be brought down at the level of their neighbouring and other competing countries, while priority should be given to the export oriented industries in the supply of all utilities without interruption.

Apart from this, the government has been time and again proposed to hire foreign consultants for assessing the difference in the cost of manufacturing in Pakistan vis-a-vis Bangladesh, India, Sri Lanka, Cambodia, Vietnam and China. This would actually give a true and clear picture on their exports that have nose-dived.