Textile exports may decrease to $2b by FY end, fears PTEA

FAISALABAD – Textile exports have declined by 1,333 million dollars over the last seven months and if the recommended Rs30 billion are not allocated in the budget, the textile export downfall will be 2 billion dollars by end of the current fiscal, warned the Pakistan Textile Exporters Association.
“Barring first three months of the current financial year, the textile exports have recorded continuous decline between 10 percent to 19pc over the last 7 months,” Chairman Rana Arif Tauseef elaborated. “In the ongoing last month, the decline would further widen.”
Touching on different irritants in the way of textile exports, the PTEA chief said that huge amounts of exporters are stuck up in local taxes drawback scheme, custom rebate, sales tax and federal excise duty refund. If these funds of exporters are released, the exporters would be able to expand their export. He stated that Ministry of Textile Industry had recommended allocation of 30 billion rupees for local taxes drawback but this recommendation has not been included in the budget. He urged the government to take cognisance of the difficulties being faced by the exporters as well as the dipping of textile exports and to take immediate measures to allocate 30 billion rupees.
He also took exception to allocation of Rs10 billion to TDAP and said that since the exporters were paying 0.25% export development fund, this amount should not be allocated to TDAP but to exporters to help increase the exports of the country. He demanded that the cost of doing business should be reduced and unnecessary burden on exports should be lessened. In this regard, he demanded the removal of protective duty on imported inputs like caustic soda, filament yarn, nitrogen, screens, dyes and chemicals used for manufacturing of export goods.
“This would enable the exporters to reduce the cost of production and become price competitive with regional rivals on export front,” he said. “Alternately the exporters should be allowed deemed duty drawback against these inputs. Rs30 billion recommended by ministry of textile industry should be allocated to textile exporters for various refund regimes.”
Elaborating, he said, huge funds of exporters were stuck up in local taxes drawback scheme, custom rebate, research and development scheme, sales tax and excise duty refund scheme. The exporters are presently confronted with liquidity crunch and are not in position to increase their export turnover, he added.
There was dire need to provide impetus to exporters in order to stem the declining trend in textile exports which having dipped 16% over the last seven months, are estimated to further stoop by 2 billion dollars by the end of current fiscal, he observed. Teh PTEA chairman urged the budget makers to take a realistic view of economic realities and to set in motion appropriate remedial measures to lift the economy and textile exports from negative path. He emphasised the urgency in view of short time available to put the things in order.