Textile industry stakeholders demanded of the government to sign a Preferential Trade Agreement (PTA) with India before granting it Most Favourite Nation (MFN) status, it was learnt. The proposal was tabled in a meeting organised by the Ministry of Textile Industry with the industry stakeholders, here on Thursday.
During the meeting industry stakeholders expressed concerns over the way MFN status to India was being handled. They insisted that replacement of positive list with a negative list was not the way forward in the matter. The stakeholders also proposed the government that assurance should be taken from India to remove non-tariff barriers (NTBs), sources revealed who attended the meeting.
The agenda of the meeting was to consult the industry on three major issues included decline in textile exports, textile policy implementation and ongoing negotiations on granting MFN status to India. Besides, Federal Minister for Textile Industry, Makhdoom Shahab-Ud-Din, the meeting was attended by representative of all major textiles associations and chambers of commerce and industries.
Vice Chairman Aptma shared various tools, which India was using as NTBs against Pakistani exporters including banking transactions and not honoring LCs of Pakistani banks. The industry representatives recommended that the issue of gas load management, increase in the textile industry's NPLs and issues related to GSP+ and EU tariff package must be taken up on priority basis.
Secretary Ministry of Textile Industry Shahid Rashid shared the views of the Ministry on the agenda items. Secretary briefed the participants on textile policy implementation. He informed that the Ministry has signed MoU with EOBI and Social Security Departments of Punjab and Sindh to reimburse EOBI and Social Security of women and handicapped employees working in textiles sector from the date of commencement of Textiles Policy that is October 2009.
The secretary also informed that in proposed Textiles Industry Development, Promotion and Standards Act, the clause pertaining to levy of cess has been modified. He also briefed on disbursement made to textiles sector in various schemes under Textiles Policy including recent-release of Rs 2 billion for drawback of local taxes and levies. The Bed Wear Association was of the view that Export Refinance Rate, which was 7.5% three years back has been increased to 11%. He further added that there was a need for reducing such rates as in this era of economic recession, countries needed extra efforts to get business in presence of over capacities available.
Javaid Bilwani expressed his concern about utilities availability, fluctuating utilities prices and recommended that textiles sector should be assured of utilities and fixed prices of utilities for the year. He also said that if same quantities were exported then still there would be 33% reduction in export values due to lower cotton prices. He suggested that in gas management textile sector should be placed at the same priority level with Urea.
Ejaz Khokar was of the view that buying scenario has changed and due to EU economic crisis, export proceeds had been delayed and there was a need to review the EFS time limits. Seth Akbar representing Aptma was of the view that the textile sector should be given priority in gas management.
Shahzad Saleem, Chairman Pakistan Readymade Garment Association said that efforts should be made on proactive basis to get the unilateral duty concessions by EU. This would facilitate the industry especially in economic crisis. He also urged that Pakistan should actively lobby to get GSP plus in 2014.
Pakistan Yarn Merchant Association requested the Government to fix minimum support price and urged Government to buy cotton through Trading Corporation of Pakistan (TCP). Rafiq Godal highlighted that due to current stiff competition, number of non-performing loans in textiles sector has increased during this year. He said that due to utilities availability problems the power set-up costs have increased from 3% to 15%. He also suggested that diesel should be provided on duty free as 75% of SME industry has been using diesel generators. He also mentioned the subsidies provided by the competitor governments to their textiles sector.
He also pointed out that the Ministry of Finance only released Rs 19.25 billion compared to Rs 123 billion as approved by the cabinet under the Textile Policy for first three years.
Khawaja Usman saidm "Local taxes and levies shall be suspended until government does not release the required funding." The All Pakistan Bedsheet and Upholstery Association recommended that Export Development Fund should be controlled by the Ministry of Textile to the extent of contribution made by the textiles industry. This would facilitate the Ministry to take immediate measures as per the requirement. He pointed out that the textile sector has not been getting their share in EDF disbursements.
Minister, Makhdoom Shahab-ud-Din appreciated the recommendations of the stakeholders. He indicated that issues pertaining to others such as SBP, Ministry of Petroleum & National Resources, Ministry of commerce would be taken up to seek a resolution. A meeting of a representative delegation of the textile industry will also be arranged with the President of Pakistan.
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