Three associations of garment and knitwear manufactures and exporters have opposed the demand of fabric exporters to allow 3 percent Research and Development (R&D) support on export of dyed fabrics to all over the world instead of some selected countries as per SRO 803(1)/2006.
This was stated by three associations namely Pakistan Readymade Garments Manufactures and Exporters Association (PRGMEA), Pakistan Cotton Fashion Apparel Manufactures and Exporters Association (PCFAMEA) and Pakistan Knitwear and Sweaters Exporters Association (PKSEA) in a joint letter to Dr Salman Shah, adviser to the Prime Minister on finance and economic affairs.
They opposed demand on the bases (1) price of fabric would be increased for local value added garment industry, as the fabric price is determined on the basis of export prices. Due to this incentive on export fabric manufactures would charge 3 percent more on local supply for the garments manufactures. Due to this the fabric for local garment manufactures would be increased.
(2) Due to this support Pakistani fabric would be available at cheaper rate in international markets, therefore Pakistan main competitors would get more benefits. In this way the support would actually transfer to Pakistan competitors and make them more competitive in international markets. They urged the adviser to make no change in the list of countries for which this support was given under SRO.
They further said that Pakistan competitors governments are giving various incentives to this value added garment sector, which have made them highly competitive in international markets. Whereas Pakistan value added garment sector are receiving the only support of 6 percent R&D fund. Under Textile Package support would be decreased to 3 percent from July 1,2007 and from 2008 it would be withdrawn.
If it is decreased or withdrawn, garment sector would become completely un-competitive in international markets. They urged the adviser to withdraw the decision of reducing R&D support on export of readymade garments and keep it continue in competing in current international market scenario.
They also said that due to negative travel advice by the developed world apparel exporters travel more frequently for procuring export orders. This is estimated that it cost more then 5 percent of the total production cost of readymade garments.
They urged the advisor to provide 5 percent travel relief support to the garment manufactures cum exporters. The letter was signed by Bilal Mulla, Chairman PRGMEA, Javed Akhtar, Chairman PCFAMEA and Kamran Chandna, Chairman PKSEA.
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