FAISALABAD: New textile policy is likely to be approved in the next two weeks, said Commerce Minister Khurram Dastagir Khan while speaking to exporters at a meeting on Wednesday.

He further stated that despite all handicaps, Pakistan crossed the target of an additional $1.08 billion exports to the European Union within 10 months (January to October 2014) under the GSP Plus scheme.

The figures are encouraging for value-added textile sector as its exports to the EU have shown 25 per cent growth, the minister said, adding it is a great achievement, despite energy shortage and extremism.

Talking about refund payments, the minister stated that the commerce and the textile industry ministries were advocating the case with the finance ministry.

Moreover, the commerce ministry, with US collaboration, is organising a business opportunity conference next month in Islamabad.

On the energy issue, the minister said that the government was working on bridging the gap between demand and supply and has come up with a comprehensive energy policy.

Stalled refunds

Earlier, textile exporters sought release of stalled refund payments, and raised other issues faced by them.

Speaking on the occasion, Pakistan Textile Exporters Association Chairman Sohail Pasha said that withholding of refunds was proving a major hurdle in growth of exports.

Long delays in getting refund payments have created a liquidity crunch, he said.

He further stated that withdrawal of zero-rating had affected exports of Pakistan, and was leading to corruption.

Cost of doing business in Pakistan had increased and textile exports are at a comparative disadvantage in the region.

Pasha said energy crisis was terribly hampering industrial growth. He termed GSP plus a milestone achievement of the government.

Duty on cotton yarn

The value-added textile sector has demanded withdrawal of five per cent import duty on cotton yarn as it increased the cost and rendered products uncompetitive in the world market.

Leaders of different segments of value-added sector, including fashion apparel, ready-made garments, hosiery and knitwear sweater exporters, argued that the sector earns $11.49bn through exports, but for incentives the lobby of spinners manages to prevail.

They said the same lobby was pushing the government on 5pc additional import duty on cotton yarn.

These leaders further said if supply of cheap cotton yarn is not ensured, country’s exports would bear the brunt.

They raised question over spinners commitment to free market.

“When it comes to cotton yarn imports which is a raw material for value-added sectors, they misguide the government and suggest imposition of duty,” a leader told Dawn.

“The current 5pc import duty is making imports of cotton yarn from India difficult. If duty is raised to 10pc, the business will suffer,” he added.

These leaders demanded that value-added textile sectors should be allowed duty-free import of raw material and restrictive duty be imposed on export of cotton yarn.

Published in Dawn February 5th , 2015

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