The increase in the rate of export refinance from 3 percent to 8 percent during last three months had created a difficult situation for carpet manufacturers, which could create liquidity crunch in the industry, apart from hitting country's carpet exports. Convenor Carpet Committee of the Lahore Chamber of Commerce and Industry, Mohsin Banday said this while talking to newsmen here Friday. "Before 9/11, one dollar fetched Rs 70 including duty drawback. In the last four years, duty drawback has been phased out and the dollar was now worth Rs 59, which had reduced the exporters income, manufacturing functions and wages bill," he added.
He further said that there was a rumour of further increase in export refinance to 10 percent, which would badly hit the local carpet industry. Whatever advantage the indigenous industry had so far gained over Indian, Chinese and other carpet exporters because of innovative neo-classical designs would be lost. If export declined, this would directly hit 1.5 million labour force in the rural areas engaged in carpet making.
Naeem Tahir Shaikh, spokesman of the carpet industry, said that the carpet industry was a high value added labour intensive industry. In the new design carpet made by Pakistan, the element of labour was as high as 80 percent. So any reduction in exports as a result of high refinance rate would directly affect thousands of carpet weavers.
He asked the government to devise a special package of incentives to keep the carpet industry afloat, especially in view of its contribution to foreign exchange earnings and rural employment generation.
Comments
Comments are closed.