Two different delegates of Karachi based business leaders will meet Federal Minister for Finance Syed Naveed Qamar in Islamabad on Friday and discuss forthcoming federal budget 2008-09 and crises faced by textile and denim sectors.
The Pakistan Denim Manufacturers and Exporters Association (PDMEA) is all set to meet the Finance Minister and Secretary of Commerce on Friday to present the real facts and figures, so that denim exports from Pakistan remain sustainable and can be a major source of foreign exchange earning for the country.
Talking to Business Recorder on phone, leader of PDMEA delegation Dr Mirza Ikhtiar Baig said that he has met federal secretary ministry of textile on Thursday and apprises him of R&D support issue and other problems faced by the denim fabrics sector.
He said that the secretary assured that he would include all his suggestions in his report to be presented to the textile minister, finance minister and commerce minister.
In recent years denim fabrics sector has emerged as a new and growing sector of the textile industry in Pakistan contributing significantly to exports and serving to boost the growth of related garments manufacturing and exports as well.
The government has also been supportive of these efforts and has provided the denim sector R&D support of 3 percent to encourage R&D in the sector as welt as to sustain and enhance the export effort of the denim manufacturers and exporters in the face of stiff competition from countries like Bangladesh, India and China where this sector enjoys full government support and incentives.
The government needs to realise the fact that big international brands are targeting Bangladesh as a new destination for establishing denim-manufacturing units on a large scale. Bangladesh enjoys the advantage of zero duty access to the European and Turkish markets as well as lower production costs owing to gas at a quarter rates and labour at half rate to that in Pakistan.
Therefore, to face this threat to our denim export that is emerging from Bangladesh, it is imperative that the government is aware and alive to this threat and constitutes policies to shore up and protect the local industry.
However, certain ill-informed and inimical quarters are advising the government to discontinue the R&D support to the denim sector and God forbid, if they prevail, it will spell doom for the Pakistani denim industry and cause immense damage to the economy as well as export efforts of the whole textile industry.
Another delegation of Karachi based business leaders including Nisar Shekhani, Zubair Motiwala and others will also meet Federal Minister for Finance Syed Naveed Qamar and Commerce Minister Shahid Khaqan Abbasi in Islamabad on Friday.
The delegation will apprise the finance minister about difficulties faced by guanine importers of dyes and chemicals due to five different rates of duties on chemical and dyes including 25 percent, 15 percent, 5 percent and zero rate.
These differences in rates are creating big problem for imports. The delegation would try to convince the finance minister that there should be one rate of duty at 5 percent on all imported dyes and chemicals.
At present around 70 percent of dyes imported in 15 percent duty slab. While some of the importer imported 15 percent duty slab goods under zero rates through mis-declaration and under invoicing which are causing huge revenue losses to the government, sources said.