High export refinance at 6.5 percent coupled with hike in the cost of inputs like gas, petroleum and electricity will severely hurt textile exports of the country already reeling under 13.1 percent anti-dumping duty and 12 percent generalised preference system (GSP) concession withdrawal.
This was apprehended by the Pakistan Textile Exporters Association (PTEA) Chairman Faiq Jawed while talking to newsmen here on Friday. He said the Pakistani textiles would now be displaced in the international trade scenario of post-quota regime.
During the period when refinance rate remained stable at three percent, the exports of textile from the country registered increase and the national exports broke the barrier of nine billion dollars after remaining static for years at eight billion dollars, he pointed out.
With easy finance rate, he said, the exporters were planning to expand their export business and attain greater turnover of export volume.
Arguing, Faiq Jawed said that it was due to low export refinance and lower commercial credit rate, which helped the exports of the country to jump from nine billion dollars to 12.7 billion dollars and the achievement of higher target of 13 billion-dollar plus for the current fiscal looked feasible.
But with the frequent enhancement in the rates, the refinance had become very costly, adversely affecting the growth of textile exports, he said.
The PTEA Chairman further stated that the textile exporters would be under hard pressure as their huge funds were blocked in sales tax refund regime and they had to fall back on the export refinance and commercial credit for export performance and planning. The rate of commercial credit had also gone up to 10 percent and the textile exporters were finding it difficult to acquire working credit for their export orders, he said.
Faiq Jawed feared that the enhanced refinance rates would dampen the pace of exports, which was trying to gain foothold in the new international trade order.
He said that this was the most crucial juncture for the Pakistani textile exports, and the government, instead of pressurising the exporters, should provide them incentives to compete with their rivals.