The national export target of $25 billion may not materialise because of the government's failure to implement the textile policy in letter and in spirit, lack of power/gas utilities and the global perception about the country's low production capacity, textile sector's stakeholders told a Senate sub-committee on Thursday.
They said that production and export commitments had been halted because of these reasons compounded by held up duty drawback claims worth billion of rupees. The sub-committee meeting was presided over by Mohsin Khan Leghari. Lack of utilities, certified cotton seeds and bad perception in the world about production capacity of the industry were other reasons behind the current deterioration of the textile industry in the country. Availability of utilities and subsidies provided by competitor governments are putting textile exports at a disadvantage in the international market, stakeholders informed members of the Senate panel.
The meeting was attended, among others, by Chairman Pakistan Hosiery Manufacturers and Exporters Association Javed Balvani, Chairman Towel Manufacturers Association of Pakistan Mehtabuddin Chawla, and former Vice-Chairman of Pakistan Cotton Ginners Association Mukhtar Ahmad Baloch. The examined issues confronting the textile sector to find out ways and means to remove hurdles and improve the industry's performance.
Joint Secretary of the Ministry Kanwar Usman said that the Ministry was facing difficulties in implementing some Textile Policy (2009-14) measures, including the Support Scheme, because of a financial crunch. He maintained that against the demand of Rs 42 billion for implementing these initiatives, just Rs 9.8 billion was released in 2009-10, Rs 7.5 billion against Rs 46 billion in 2010-11 and Rs 6 billion against Rs 35 billion in 2011-12.
He said that huge pending liabilities under operational schemes were causing resentment among the industry. Balvani said that the value-added textile export sector amounted to 50% of total domestic exports, contributing 80.26% of the textile sector's earnings. However, due to failure in implementing textile policy in letter and spirit, not only the envisaged export target of $25 billion was in jeopardy, but owing to huge amount of held up drawback claims, "our production and export commitments have come to a standstill".
He called for uninterrupted supply of gas, electricity and gas, uniform and rational tariff for electricity, gas and water. Raw cotton, he said, should be regulated to ensure regular and adequate supply while sales tax refunds and custom rebates should be paid to exporters along with export proceeds via State Bank of Pakistan.
Chawla said that there was a huge potential for Pakistan in the US and European markets, but Pakistani exporters could not meet large export orders because of acute shortages of gas and electricity. He said that there was a perception in foreign countries about domestic manufacturers inability to meet order in time. Mukhtar said that because of absence of certified cotton seeds, the production remained low. There was no ginning institute in the country, adding that it negatively impacted research in this regard.
The chairman called for joint effort to save this vital sector, agreeing with the stakeholders that there should be adequate and uninterrupted supply of energy, adding that it was also vital to overcome the shortage of certified seeds in the country.