Reduction in 6 per cent R&D subsidy to hit garment sector
RE - Research and Development is vital for the garment sector and any reduction in six per cent R&D subsidy will wipe off Pakistan exporters globally, who are fighting for their survival all alone, said Ijaz A. Khokhar, former Chairman Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) here Thursday.
Talking to newsmen he said that the R&D should be increased upto 10 percent, however, government contrarily was considering of providing the facility in slabs, where only one percent of the exporters would get the benefit. He said 90 percent exporters falls in the category of SMEs who were exporting up to $ 3 millions. He said that 4 percent exporters could touch the $3 t $5 million category, 3 percent $5 to $10 million, 2 percent $10 to $ 25 million and only 1 percent over $25 million could converge the proposed slab of getting all the facility of R&D. He said that the categorising only would harm the sector, which consist of 90 percent of the SMEs.
Khokar said that the buyers are getting the benefit of the facility and the accusation that no Research & Development activity was being carried out in-spite of 6 percent R&D facility was simply baseless. 'I can request for a visit to any factory in the Industrial area in receipt of R&D subsidy and will find that more than 70-80 percent of 6 percent R&D subsidy is being spent on expanding working area, added high-tech machines, computerized system and 20 percent on training to produce skilled labour for the factory; he added.
He said that setting up of garment city at Sialkot should be announced besides establishing an institute and most importantly, he said creating textile development centres not only in Sialkot but other big cities would facilitate the apparel sector of the country to compete the international market.
Insofar as marketing efforts are concerned, Ijaz Khokar said that country was in the grip of uncertain security safeguards to the foreign buyers on tours. After traveling to India,e said, the buyers prefer to rush back to their countries and the exporters of Pakistan let it be known visit five-six and even 12 times in a year foreign countries to exchange working arrangements and offering assurances to continue in the stream for export.
Regretfully, Khokar said, insofar as the Commercial Attaches on behalf of Pakistan in Foreign countries excepting a few who are prompt in response, hardly other send economic reports of their areas of jurisdiction and the exporters have to seek support of internationally displayed reports of experts through Internets. 'It is understood that even economic reports are marked "Confidential" that is to remain out of reach to the business Community', eh said.
Khokar said that Sri Lanka and Bangladesh and also other countries able to obtain duty free export status, however, he said, 'we were not considered for zero rated GSP plus facility even"
About "Branding" activity Khokar said that the introduction of any country's brand needs millions of dollars for development and there has not been any support from the government despite announcing the facility. 'Absolutely no assistance has been provided to the garment sector in the past in this context' he said adding that all that the Industry wishes to agitate is that at-least it deserves to be provided a level playing field and in return the Industry could undertake to increase exports three times in a span of five years.
Khokar said that the travel expenses had increased tremendously and minimum of 5 percent exemption should be allowed to enable touring for seeking business from the buyers besides making the cotton fabric etc. supply certain. He said that there is a need to place fabric and accessories to be zero rated, which would ease the situation to a solution.
Khokar said that It is the demand of the Industry that similar to EPZ (Export Processing Zone); the exporting Industry Units of PRGMEA exporting Garments be also included to the facilities which are being extended to EPZs. There is also demand of the Industry that same facilities as are extended to the Investors from abroad by made available to local investors to encourage setting up modern manufacturing facilities for export.