The exports of textile fabrics in the first four months of current fiscal year have shown a quantitative decline of 38 percent, reflecting the non-competitiveness of Pakistani textiles consequent upon high cost of production in the country and export facilitation disparities in South Asia region.
This was pointed out in a presentation to Federal Textile Industry Minsiter Mushtaq Ali Cheema by Pakistan Textile Exporters Association (PTEA) Chairman Rana Arif Tauseef during a huge gathering of exporters here last Saturday evening.
The PTEA chief, while substantiating his argument, said that exports of textile fabrics in June this year were 328 million square meters, but in July the exports went down by 9 percent to 302 million square meters.
In August, the exports further declined to 273 million square meters indicating 10 percent decrease over July, he added.
In September, the fabrics exports were 264 million square meters down by an other 3 percent over August , while in October there was a sharp decline of 24 percent over the preceding month in fabrics exports being 204 million square meters against September exports. The decline in first four months of FY06 against June 2005 works out to 38 percent, he mentioned.
Pin-pointing the factors underlying the critical situation of sharp quantitative decline in fabrics exports, Rana Arif Tauseef cited example of rising cost of inputs like electricity, gas, POL products and high cost of financial credit in the country ranging up to 18 percent and excessive taxes and levies on exports. The external tariff barriers of anti-dumping duty and customs duty by European Union were other dampers on Pak textile exports, he added.
The effect of these internal factors escalating production cost and external barriers made Pak textiles non-competitive in international market, and hence decline of 16.3 percent in textile exports to EU up to August this year, he added.
Regarding export facilitation disparities in South Asian region, the PTEA chief quoted the comparable position in Bangladesh where the exporters were enjoying tax holiday for 10 years as against 1 to 1.5 percent income tax in Pakistan. There were no levies like old-age benefit, social security, gratuity in Bangladesh. Labour was cheaper there and import of raw material and spare parts were duty-free there, he said.
Similarly, China and India were offering concessional inputs to their exporters besides other un-built concessions, while Pakistani were grappling with sales tax, customs duty, and a host of other departments, he stated.