ISLAMABAD: Pakistan’s textile and clothing exports fell 1.98 per cent year-on-year to $11.234 billion during the first 11 months of the current fiscal year mainly due to lower proceeds from raw material and low value-added products, such as cotton yarn and fabrics.

Data released by the Pakistan Bureau of Statistics on Tuesday showed the decline in export proceeds was also evident in rupee terms during the July-May period of 2016-17.

On a month-on-month basis, the export proceeds fell 12.24pc in May negating the government’s claim of reviving the growth in the sector despite offering huge subsidies.

Exports of value-added products grew in terms of both value and quantity during the July-May period.

Product-wise details show exports of ready-made garments rose 4.15pc while those of knitwear dropped 1.85pc in July-May. Exports of bedwear edged up 3.22pc, while those of towels fell 4.77pc.

In primary commodities, exports of cotton yarn witnessed a year-on-year decline of 3.64pc while those of cotton cloth and yarn (other than cotton) dropped 5.81pc and 27.32pc, respectively.

Exports of made-up articles, excluding towels, dropped 0.45pc and those of tents, canvas and tarpaulin grew 52.85pc. Proceeds from art, silk and synthetic textile exports declined 33pc while exports of raw cotton also recorded a year-on-year decline of 47.14pc.

The preferential access to the European Union under the GSP+ scheme hasn’t boosted proceeds due to a slump in demand.

Overall export proceeds in July-May were down 3.13pc to $18.540bn.

Last year, the government announced a textile policy that gave a 4pc rebate on the exports of readymade garments on a 10pc incremental increase over the preceding year, 2pc on home-textiles and 1pc on fabric. No support was announced on raw material or yarn exports.

Jan 15 onwards, the government has not only increased the rebate to 7pc for readymade garments, but also allowed cash support of 4pc on yarn and grey cloth under the Rs180bn package announced by the prime minister.

Out of the total allocations, an amount of RS107.5bn was allocated to textiles sector – Rs87.5bn for drawbacks and Rs20bn for withdrawal of duties/taxes on import of cotton and machinery. Moreover, an amount of Rs12.5bn was the annual allocation for drawbacks on export of non-textile value added sectors.

The duty free import of textile machinery was continued for fiscal year 2015-16. The sales tax zero-rating regime for the five export sector was continued in the fiscal year 2017-18. Similarly, spinning and ginning sector have been included in the long term financing facility. The export finance rate is currently at 3pc, which is the lowest in a decade.

Published in Dawn, June 21st, 2017