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PRGMEA worried at losing export markets to Bangladesh
May '16
The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has voiced its concern at Bangladesh's rising garment exports that is eating into Pakistan's markets.

In a statement, Shaikh Mohammad Shafiq, Central Chairman of PRGMEA said that at present total export of Bangladesh is $33 billion out of which textiles is $27.5 billion which includes $26.5 billion of garments only.

“We feel our share has been taken by Bangladesh. We need to fight for it and bring it to our advantage. Their exports are now increasing at $3.5 billion per year and expected to hit $50 billion per year by 2020, and whatever they have been giving in their budget estimate in last three years is coming true,” he said

According to the statement, Pakistan ranks 138 out of 189 on ease of doing business, slipping two place from last year's position. The cost of making garment in Pakistan is almost double to that of making in Bangladesh. The 60 per cent cost component of wages has a vital impact which is two times in Pakistan, the other costs that includes energy and financials also burdened due to high tariff.

Shafiq said the Government must realize that time has gone when raw material used in textiles (yarn, fabric etc) could be exported. This trend is not going to continue and it is the reason Pakistan is facing serious downfall. Countries have to use their raw material and export only possible in the form of finished products - garments. “We must believe in concept that countries have to be completely vertically integrated to use their raw materials in completely finished product,” he said in the statement.

“If we see the exposure of these economies towards value added sector, cost is one of the key factors that Pakistan's garment export is only 10 per cent of Bangladesh's woven garment sector, which shows keen interest of Bangladesh Government and other low cost wages countries to boost up this sector and to offer different incentives and schemes to further enhance and growth of this industry,” he said.

He also said that low cost of labour in Bangladesh goes in favor of employers. While the minimum wage is around $68 in Bangladesh, in Pakistan it is $125 and rising. Additionally the lower utilities cost further benefits the manufacturer, he pointed out.

According to the PRGMEA It is now the need of the hour for the Pakistani government to develop a coherent plan that allows some sort of exemption/concession to the garment sector to arrest its decline.

Shafiq reiterated that the garment sector immediately needs zero-rated regime that had been announced by the Prime Minister. He also sought the release of pending refunds against sales tax, duty drawback and drawback on local taxes and levies (DLTL). Tariff of electricity, gas and water for export sectors should also be brought down, he said. (SH)

Fibre2Fashion News Desk – India

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