To gain a competitive edge, the government should reduce the cost of doing business as the textile exports are at disadvantage in respect of production costs as compared to their competitors in the region, demanded the Pakistan Textile Exporters Association.
PTEA Vice Chairman Sheikh Ilyas Mahmood and Chairman Adil Tahir said that due to inefficient and unfriendly socio-economic environment, the cost of doing business in Pakistan had escalated enormously due to intermittent raise in the prices of raw material and production inputs rendering our exports uncompetitive in international market.
“Textile industry in Punjab is facing the issue of competitiveness not only with rival countries but also within the country. Energy constraints have halted the industrial wheel and high production cost has disrupted the competitive edge of textile exports in international market. Even the summer is at its peak but export-oriented textile sector is still deprived of 67% gas supply,” they said. “Textile industries in rival countries are getting not only constant supply of gas and electricity but also on cheep rate. Gas and electricity tariffs and discount rate in Pakistan is much higher than in the region.”
They elaborated that power rates in Pakistan were 16.54 cent per unit, 78.7% higher than in Bangladesh, 66.87% than in India and 22.3% higher than in Sri Lanka. Similarly, they added, gas rates in Pakistan are 141% higher than those in Sri Lanka and 18.93% than in India. Referring to discount rates, they said that discount rate in Pakistan is 10%, whereas it is 7.75% in Bangladesh, 8% in Sri Lanka and 9 percent in India. “Taking advantage of this, the other countries are creeping into our traditional markets throwing the Pakistani textiles out,” they lamented.
Ilyas was of the view that in spite of continuous representations, no worthwhile effort had been made towards reducing the high cost of doing business. Government should rescue the value-added textile sector from troubles, as it is the biggest foreign exchange earning industry for the country contributing 67 percent of the same, he said. GSP plus trade incentives had opened a big window of opportunity for Pakistan to not only push up its textile exports but also produce a trade surplus to help the government overcome its trade deficit, he said.
“Without addressing the major challenges and reducing the production cost, opportunity of GSP plus will remain fruitless. It is the right time to take effective measures and get maximum benefits of the facility otherwise the survival of the industry will remain in doldrums,” he said. Giving example, he said that Pakistan’s textile exports were too close to Indian textile exports few years back but with 5% industrial growth rate, their annual textile exports have now crossed USD 33 billion mark. The PTEA officeholders urged the government to step up efforts to save the sector from disaster as challenges like energy crisis and high cost of doing business were holding the mainstay of national economy back from growing up to full potential.