On the recommendations of the Ministry of Commerce, Prime Minister Raja Pervez Ashraf has okayed the formation of Export Promotion Leather Council under Strategic Trade Policy Framework 2012-2015 and gave the leather sector a 'Priority Status' with a view to enhance the leather sector exports to three billion dollars.
The formal approval for the formation of the Leather Council, which has been established on the patron of Indian Leather Council would be given in the upcoming Cabinet Committee's meeting, senior Minister of Commerce Makhdoom Amin Fahim disclosed this at a meeting in Karachi with a delegation of the Pakistan Tanners Association led by its Central Chairman Agha Saiddain.
Agha Saiddain told Business Recorder here on Friday that Amin Fahim also informed the PTA team that apart from accepting the leather industry's demand, the Ministry of Commerce had also proposed in the new three-year Strategic Trade Policy Framework to hand over the control of Export Development Surcharge (EDS) to the Ministry of Commerce. It was pertinent to mention that presently the EDS was being controlled by the Ministry of Finance, he said.
It is to be noted that the government had stopped funding the local industry through EDS to participate in international industry fairs. The government collected 0.25 percent on account of EDS, which amounted to about Rs 250 million annually, he added. According to him, the Minister also informed the delegation that PM had agreed to transfer the total EDS fund to the Ministry of Commerce so that it could be used for the development of exports which was the real purpose of this fund.
On this occasion, Federal Secretary Commerce Munir Qureshi who was also present at the meeting agreed to the problems mentions by the PTA Chairman as genuine and promised that the duty draw back rates pending with Input Output Coefficient Organisation would also be decided very soon.
Federal Secretary Commerce further said that after formation of Leather Council all the demands of PTA would be addressed and asked PTA to help the Ministry of Commerce in identifying people involved in miss-declaration so that they could be made example for others. Munir Qureshi advised the Chief Executive Officer of the Trade Development Authority of Pakistan to take into the genuine demands of leather sector and forward a proposal for their solution. The CEO assured the delegation that TDAP would try to solve all genuine problems of leather sector.
Earlier, while giving a presentation to the Federal Minister for Commerce PTA Central Chairman Agha Saidain explained in detail the problem which leather sector was facing for last five years. He said the growth rate of leather sector of China, India, and Bangladesh in last five years was recorded as 46.67 percent, 40 percent, and 102 percent respectively.
He further added that Pakistan was at number two position after Italy as far as quality of leather was concerned and under those circumstances it was not difficult for us to achieve the same growth rate of 46.6 percent. He further explained that total export performance of leather was 1.22 billion dollars during the year 2007-8 and the sector could have reached to the level of 1.788 billion dollars during the year 2011-12 against actual exports of 1.048 billion dollars ie 70.61 percent less than achievable level of 1.788 billion dollars.
"I also informed the Senior Minister that Pakistan lost 49 percent of its global share in last five years which is alarming," he said, adding that countries like Italy and Vietnam with very little livestock population had 13 percent and 6.22 percent of global leather market share respectively and Pakistan with total livestock of 160 million have only 0.76 percent share of global market.
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