Value-added textile sector not to benefit from EU duty concessions: PAF chief

The overall impact of duty concessions offered by European Union (EU) to Pakistan would not be of much benefit to the value added textile sector, as export of raw material would increase cost of doing business due to shortage of raw material in the local market.
This was stated by M Jawed Bilwani chairman Pakistan Apparel Forum in an exclusive talk with Business Recorder here on Tuesday. "Major objectives of allowing duty concessions to Pakistani products are; to help Pakistan economy in moving upwards in the wake of the recent unprecedented floods in the history; to recoup huge losses to the agro-based economy, to revive its infrastructure and to absorbs displaced workforce in jobs, but all these efforts would add nothing to the value added textile sector just because of the following facts", Javed added.
Balvani said that out of the list of 75 items for which duty-free concession have been offered by EU, 33 consist of textile raw materials mainly (yarn and fabric), which is the blood and lifeline of the value added textile export sector and would result in steep increase in local prices of this basic raw material, he said.
He further said that the items, which contribute to value addition fetched export orders of less than 10 million Euros previous year. The benefit accruing to Pakistani exporters from these items in terms of duty waiver would be 33 million Euros. However, with the export of 33 raw material items due to duty concessions, the local prices of these items would raise owing to shortage as a result of which the cost of doing business would become 4 percent to 5 percent higher reducing the overall benefit of duty saved from 33 million Euros to 25-30 million Euros, he said.
Jawed Bilwani further said that the value added textile export sector which generates the largest employment would be seriously affected by this concession and consequently would serve no purpose at all. He further said that exports of raw materials to any country would be instrumental in closing local industries, increasing unemployment, which ultimately would lead to irreparable loss to the economy.