KARACHI, Jan 15: Delay on the part of the government to announce relief and incentive package to textile industry on the recommendations of the National Textile Strategy Committee (NTSC) was causing anxiety and frustration amongst textile exporters.

The committee was headed by Tariq Saigol that made its presentation before Prime Minister Shaukat Aziz early last month (December 2006).

Confronted with high cost of input and lower per unit price in the world market, the textile industry has been fighting a war of survival. Its competitors from Bangladesh, India and China enjoy better incentives and lower input costs for cheaper utilities, capital cost and duties.

Despite the fact that the prime minister expressed his satisfaction over the presentation made by Tariq Saigol that recommended some relief measures for textile industry and a four-member committee was also constituted by him to evaluate and finalise the relief package, but no development has taken place, so far.

The prime minister heads the committee, with its members being the secretaries of ministries of textile and commerce, deputy chairman, planning commission and Dr Ashfaq Ahmed Khan.

During the meeting which was held on Dec 7, some of the leaders of textile industry insisted that the government should come up with some relief package before the Heimtextil fair, Frankfurt, Germany, to be held on Jan 10, as the event is of great significance for textile products and Pakistani exhibitors would be better placed to quote their prices with visitors and buyers.

However, the request was ignored, and instead a committee was formed by the prime minister which is yet to come up with any suggestion.

It is interesting to note that Tariq Saigol upheld most of the recommendations made by Zubair Motiwala committee for giving relief package to textile industry.

Nevertheless, a few new demands were raised by the NTSC document which sought concession of 0.5 to 1 per cent for all ISO-9000 and IS-14000 certified exporters as they have incurred expenditure on getting the certifications.

Those exporters who were certified for higher level should be given two per cent financial support, Tariq Saigol report suggested.

The NTSC also sought 25 per cent cut in gas prices for textile industry whereas Zubair Motiwala had been demanding 40 per cent slash in order to bring prices at par with those prevalent in Bangladesh. Both the committees were of strong view that cess collected by federal and provincial government organisations, such as EOBI and SESSI, should be abolished or deferred for some years to give relief to the industry.

Similarly, they have also demanded of narrowing the gap in the cost of utilities as there exists a difference of 50 per cent against the cost being presently paid by their competitors in the countries of the region.

Exporters claim that Bangladesh was giving 10 per cent local procurement relief to its textile industry which has become main driving force for enhancing the spinning capacity to five million spindles in a very short period.

Above all, it is also being argued by textile and clothing exporters that under GSP plus scheme of the European Union (EU), both Bangladesh and Sri Lanka are enjoying exemption on their imports to EU member states whereas Pakistani exporters have to pay customs duty between 13 and 23 per cent which could not be faced by adopting any method or skills.

Furthermore, they say that Bangladesh about three to four months back devalued its currency by around 10 per cent and Takka’s parity currently stands at around 71 to a dollar.

However, exporters have cautioned the policy-makers not to get themselves mislead by a sudden growth of around 26 per cent in textile exports during the month of November 2006 as it was because of on-going political turmoil in the Bangladesh which has proved to be a boon for our exporters and pointed out that it was a temporary breather for the crisis-ridden local textile industry.

Exporters say that the surge in textile exports in November was itself a proof that there is a demand for textile goods in the world market, but Pakistani exports could not compete owing to higher cost of inputs and because of no incentives from the government.