Textile leaders say new policy to boost exports

[LahoreEstate]

Manufacturers, exporters and traders lauded the various fund allocations, zero-rating of exports, tax-free import of machinery and rationalization of tariff structure. - File photo Business

FAISALABAD: Industrialists, textile exporters and traders have expressed the hope that the new textile policy would help strengthen textile sector, boost exports and create new jobs.

Shedding light on the salient features of the new textile policy, Pakistan Textile Exporters Association acting chairman Rehan Naseem said that the measures announced by the government would shore up textile sector, fetching the much-needed foreign exchange.

Overall exports of the country, he said, had declined by 20.78 per cent as compared to July, 2008. This huge decline was a cause for concern, and at this juncture, the government should take remedial measures to check this deterioration, he added.

He, however, said the now policy was aimed at restructuring and reorganisation of the textile sector, and was a good omen that the government had announced refund of pending research and development (R&D) claims and drawback of local taxes.

He said such measures would help capital-starved exporters to increase their exports, and help revert the declining trend in exports.

Mr Naseem was praiseworthy that textile policy envisaged removal of regulatory bottlenecks in market access, and was meant for undertaking serious measures for marketing export support hours scheme, marketing insurance and improving information and communications technology.

He said the textile investment support fund would help remove infrastructural bottlenecks and provide better marketing opportunities.

He also appreciated the allocation for sharing half of the interest on new business investment credit and contribution of 20 per cent to capital cost as grant for small investment.

Setting up of clusters, industrial estates schemes for ware-housing storage were well intended measures and allocation of Rs1 billion under this head was a good measure to consolidate the textile industry, he added.

Zero-rating of exports, tax-free import of machinery and rationalization of tariff structure were also positive measures which would help strengthen textile industry, he said.

Shabbir Ahmed of All-Pakistan Textile Processing Mills Association also appreciated the announcement of power load- shedding exemption for exempting textile industry and priority in gas supply.

He said that without these two utilities, measures announced by the government in the textile policy would not bear fruits.

He said that industrialists had been suffering a lot because of shortage of power and gas and they were unable to complete their assignments.

He lauded the government for announcing incentives in the shape of drawback for increase in exports and expressed the hope that all these measures would help boost textile exports.

The Chairman of Pakistan Dry Ports Association (PDPA) and Faisalabad Dry Port Trust Sheikh Ashfaq Ahmed said that the creation of support fund, technology up-gradation and tax-free import of machinery, rationalisation of tariff structure, zero-rating of exports, allocation of Rs44bn as special drawback rates for value-added textile exports, availability of export refinance at five per cent, relief on existing long-term loans and priority in gas allocation, like fertiliser sector, are the comprehensive measures announced by Prime Minister Syed Yusaf Raza Gilani.

He said such concrete steps and provision of a cash subsidy of Rs87 billion to textile and clothing sector would surely help achieve the set target of $25 billion textile exports.

He said owing to the severe power load-shedding and gas supply suspensions for the last six months, industrial production in textile sector had reached at a saturation point and Pakistani exporters could not honour their commitments made with foreign buyers.

Consequently, he said foreign buyers had cancelled orders furnished to Pakistani exporters and they have shifted their focus on other alternative markets, like India and Bangladesh. This was indeed a great loss to Pakistan and a serious setback to our foreign exchange deposits, he added.

Mr Ashfaq also appreciated the government decision for instituting the textile clusters and parks.

A yarn market trader Riaz Shahid said all fabrics and yarn markets were deserted before the announcement of the policy. However, he said now exporters have started making contacts with them.

He said textile sector had been facing a downturn for the last many years owing to shortage of power, gas, bad law and order situation and high rates of Pakistani textile products.

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