The Apparel sector has expressed doubts over meeting the exports target of $25 billion in the next five years set by the Ministry of Textile in first-ever-five-year textile policy. The Apparel sector sources told Business Recorder that the PAF is holding seminar in third week of October on the irritants of the textile policy.
According to these circles, the textile policy terribly lacks a marketing plan on achieving $25 billion exports by 2014. Further, he said, the present volume of cotton bales could not support the textile policy target of $25 billion. It may be noted that the apparel sector has already termed the textile policy as an elite class policy and is of a strong view that the government has offered very little to the value-added sector in the policy.
The apparel sector circles said that not a single word is given in the textile policy on tapping the potential of non-traditional markets. They said the export markets like South America, Africa and Central Asian States are highly untapped markets and the target of $25 billion cannot be met unless government takes substantive steps on this front.
One major reason in not exploring these markets is unusual transit shipment time, which is about 90 to 100 days in case of South America. Similarly, no seaport is available in and around the Central Asian States and only source of transporting the shipments to these states is through air. Shipment to African states is also being hindered by similar hurdles.
When asked the solution, Ijaz A. Khokhar, former Chairman Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), said the government should extend air freight subsidy to the exporters, especially when the exporters and the buyers in untapped markets are ready to share the burden equally.
He said both the garments exporters and their foreign buyers would share the freight burden equally with the government of Pakistan in order to market Pakistani garments in these regions. The government can start this initiative as a pilot project for one year and only continue with in case it finds it beneficial to the exports, said Khokhar.
Rather, he added, the government should offer a duty drawback of 4 percent to the exporters, against 3 percent announced in the textile policy, exporting value-added products to these markets. Only this way the government can ensure $25 billion exports by 2014, he argued. Khokhar pointed out another important irritant of the textile policy. According to him, estimates were figured out that Pakistan would produce 14.5 million bales this year.
However, it is not producing more than 12.5 million bales, out of which the country would earn $9 billion textile exports. He said the country could only touch the level of $25 billion exports in case it is producing 36 million bales by 2014, which is impossible in any case. He posed the question that how the government could set an ambitious target of $25 billion when the country was producing only 12 million bales in total.
Therefore, said Khokhar, the export target in textile policy does not match with the ground realities on many fronts. When asked how the government circles respond these concerns, Khokhar said they are of the view that this mismatch could be overcome by value addition to the textile products. Nevertheless, it is quite difficult to understand how much value addition of stoning or embroidery on garments could fetch precious foreign exchange to the tune of $25 billion by 2014.
Khokhar was also critical to the Federal Textile Advisor Dr Mirza Ikhtiar Baig who has welcomed Bangladesh decision of importing Pakistani fabric duty free in order to add value to it before exporting it to the western garments markets. He said the statement shows that Dr Baig was more of a cloth merchant than so-called textile advisor to the federal government.