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Hard work follows unveiling of Textile Policy - PRGMEA

17 Aug '09

13 min read

This is a longer term measure because first the surplus capacity has to be filled only afterwards the industry will have the strength to go for mergers and acquisitions.

Drawback of local taxes:
Compensate our value-added textiles exports for a period of two years through provision of drawback. For this purpose drawback scheme is proposed whereby processed fabric exports will get a drawback at 1% of the FOB value of exports, home textiles 2% of the FOB and garments 3% of the FOB value of exports

In addition, those who will achieve an increase of 15% in exports relative to last year will be given 1% additional draw-back.

This is certainly most needed incentive for the industry. By announcing this measure the government has given immediate relief to the exporters. The industry now feels that the disbursement of drawback should be done through the State Bank, as per the previous practice with R&D Claims, and not through Customs.

Refund of past R&D Claims:
To settle the past claims under R&D scheme of 2007-08, Government is allocating Rs 5.4 billion.

This was a long standing demand of exporters as a huge amount of past R&D claims was stuckup with the government which was causing liquidity problems.

Monetization of PTA:
Monetization of customs duty of PTA is being continued to offset additional cost for the users for the current year.

Market for garments made from polyester fiber is a growing market and the government has taken a positive step by waiving-off customs duty for another fiscal year.

Other Measures:

Removing Regulatory Bottlenecks:
An extensive exercise will be undertaken covering all sub-sectors, to identify rules, regulations, procedures, levies and other regulatory constraints that hamper the development of the sector. Based on this exercise, appropriate measures will be adopted to simplify or remove such irritants.

Multiple levies and red-tape is creating bottlenecks which chokes new investment in the textile sector. The government should immediately undertake this study which will be keenly followed by the industry.

Market Access:
Government will be expending concerted efforts to secure due access for Pakistan in some of the key destinations of our exports. Preferential access as well as FTAs in such markets will be the focus of such efforts.

Greater market access for Pakistan's textile goods to EU and USA has been a key demand from the exporters but unfortunately no results have been achieved so far. If Pakistan manages to get these concessions it will be a huge boost for the industry.

Marketing Insurance Scheme:
Government will introduce an insurance scheme to protect our exporters against unforeseen losses, which may arise due to failure of the buyer, bank or problems faced by the buyer country.

Due to the current global recession many small exporters are suffering because of non-payment or delay in their payments. By providing the vitally needed insurance coverage, the government sends positive signals to the industry.

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