The textile industry stakeholders are going to meet Prime Minister Nawaz Sharif, wherein they will seek incentives for the revival of the sector to improve the declining export, as high cost of doing business has made it difficult for the sector to compete with regional countries in the international market.
Sources told to Business Recorder that a meeting of textile industry stakeholders/associations with the prime minister was scheduled for Friday, where the PM would be appraised about the continuous decline in exports, high cost of doing business, challenges with respect to energy availability/tariff, taxation and incentives provided by other regional competitors to their respective textile industry especially India.
According to sources, a presentation has been prepared for the prime minister, according to which India''s textile exports would touch $80 billion by 2020 against the current $41.4 billion. However, Pakistan''s textile exports are likely to reach $16 billion by 2020 against the current $13.3 billion if the current situation with respect to energy crisis, high cost of doing business, heavy taxation and low investment prevailed.
Pakistan''s annual average export growth is stagnant at 2 percent for the last several years while India has 14 percent growth. Further, India''s shares in global market would touch 5.2 percent by 2020 against the current 3.5 percent. However, Pakistan''s shares would decline to 1.6 percent by 2020 from the current 2.3 percent. According to sources the prime minister would be requested to withdraw various surcharges on electricity for textile industry on independent feeders with nearly no losses and full recovery.
At present, inefficiencies of DISCOs, on account of stunted bills recovery/higher line losses, are being passed on to the most compliant export-oriented textile industry and the industry is unable to pass on the burden. Further they would request for withdrawal of GIDC and proposed increase in gas tariff, zero-rate export regime from all incidentals of taxes, duties, surcharges, levies and Cess by providing drawbacks in the form of DLTL at 5 percent against export of yarns, fabrics, made-ups and garments. The stakeholders would request for extension of long term financing (LTF) scheme of State Bank of Pakistan to ginning and spinning industry to encourage BMR & new investment initiatives to catch-up with regional competitor countries.
They will also call for single tax rate of 3 percent for the whole textile value chain which should be refundable in case of registered and non-refundable for non-registered. They would request 5 percent export incentive to capture non-traditional markets through focus market scheme and focus product scheme to export-oriented industry.