The federal government has announced to extend the six percent research and development support programme for the apparel sector for the next one-year. The announcement was made in a meeting held at Islamabad between Finance Minister Syed Naveed Qamar and a delegation of Pakistan Apparel Forum headed by Naqi Bari.
As per government notifications, the R&D support programme has expired on June 30, 2008. During the meeting, it was agreed to extend the R&D support till June 30, 2009, however the facility would be extended only to the apparel sector while home textile and cloth exporters will not get this facility.
The R&D programme was initiated for underpinning the dwindling textile exports that were hit seriously in the wake of abolishment of quota regime in European Union in 2005. The then textile minister Mushtaq Cheema announced 3 percent to 6 percent R&D support for different textile sectors.
In the first phase, R&D support was announced only for fabrics in May 2005. However, later in August 2006 some other textile products were also included in the programme.
Earlier, the government was paying 3 percent R&D support on fabrics, 5 percent on bed wear & knitwear and 6 percent on textile garments. The minister has assured the delegation that the final approval of the extension of R&D for the next fiscal year would be given in the next meeting of the Economic Co-ordination Committee of Cabinet.
However, the minister instructed the delegation to encourage exporters to improve their export performance, helping the government to bridge the rising trade deficit. During the meeting Naveed Qamar also announced withdrawal of the State Bank of Pakistan circular dated June 23, 2007, in which the central bank instructed banks and authorised dealers not to receive R&D subsidy claims of textile after June 25, 2008.
The delegation said the government should help exporters find new export markets by unveiling an aggressive marketing strategy. The delegation also demanded of the government to facilitate export oriented industries having some 80 percent export production, under the government scheme of Export Processing Units (EPU) announced in the last Trade Policy.
The demand was also accepted by the minister who instructed the FBR officials to ensure early implementation of the said announcement. Pakistan Apparel Forum delegation comprised Jaweed Bilwani, Eijaz Khokhar, Shahzad Ahmed and Bilal Mulla while officials of the finance ministry and the Federal Board of Revenue were also present in the meeting.