Comprehensive policy shift planned to overhaul textile, apparel value chain

Published January 10, 2021
The government has evolved a comprehensive package for textile and apparel value chain to promote local production and exports from the country. - AFP/File
The government has evolved a comprehensive package for textile and apparel value chain to promote local production and exports from the country. - AFP/File

ISLAMABAD: The government has evolved a comprehensive package for textile and apparel value chain to promote local production and exports from the country.

The package will be announced as part of textile policy for specific sectors — cotton, manmade fibres, natural fibres, ginning, spinning, knitting, weaving and processing, apparel and made-ups/home textiles, carpets, and handicrafts.

Official documents seen by Dawn showed that the sector-specific measures will be implemented in phases to provide uninterrupted supply of raw materials and semi-finished products to local manufacturers of the value-added sectors.

As part of the package, the Ministry of Commerce looks to attract international and domestic seed companies to introduce latest seed technology in the country. Increase in yield will also address the issue of profitability in cotton farming.

The government is also planning to re-introduce cotton hedge trading to facilitate farmers and value-added exporters. This model has successfully been operating in other countries. Moreover, provinces will be encouraged to implement the Cotton Control Act and cotton exporters will be encouraged to improve quality and avoid any chance of depressed cotton prices.

The Ministry of Commerce in consultation with stakeholders will also introduce the grading-based cotton marketing mechanism. The commerce ministry will join hands with the Ministry of Food Security to increase cotton area, production and importantly yield. Further, scope of the Better Cotton Initiative (BCI) will be enhanced to ensure bulk availability of BCI-certified cotton to textiles and apparel value chain.

Under the plan, the government will rationalise tariff and customs duty drawback rates on man-made fibres (MMF) and filaments-based value chain. International firms will also be invited for investment to bridge the demand and supply gap in the fibre-filament production.

In addition, the MMF, not being manufactured locally, will be made duty free.

A committee would be constituted for development of wool, jute, silk, hemp, and other natural fiber-based textiles and apparel value chain. Till the development of these sectors, the raw and semi-processed materials will be under in zero import tariffs.

The ministry is also working to upgrade ginning technology immediately whereas the provincial departments will be tasked to link technology up-gradation of ginning sector with the licenses.

Furthermore, the government will discuss the way forward to convert ginning sector into service industry and policy measures will be devised as the move along with the introduction of hedge trading will help farmers get fair price.

The documents noted that the spinning, knitting, weaving and processing sectors have highest share in large scale manufacturing and the availability of yarn and fabric has provided lead time advantage to Pakistani downstream value-added export-oriented sectors over competitors.

Measures such as review of the Long Term Financing Facility (LTFF) to include indirect exporters, review of customs duty drawback, and simplification of temporary importation schemes, inter/intra transfer, common bonded warehousing and tariff rationalisation of entire value-chain will encourage investment in these sectors.

It has been noticed the world over that trend has been shifted in favor of finished products, i.e. apparel and made ups. For rapid growth of these sectors, the government will initiate skill development programmes, review labour laws and role of regulatory organisations, international and domestic labour compliances but more importantly simplify temporary importation schemes for the availability of raw materials and accessories.

Moreover, new garment cities will be established to provide state-of-the-art infrastructure to the small and medium enterprises for plug and play machinery installment.

Carpets, especially of hand-woven category, will be given due importance as value-added made-up industry in the country. The commerce ministry will initiate programmes to support sector in skill development, technology upgradation, design innovation, infrastructure support and marketing.

Pakistan’s artisan economy is troubled because of non-legislation for production and marketing of handicraft products, non-existent international networking assistance, lack of design and skill enhancement facilities and absence of credit facilities from banks and financial institutions.

The Ministry of Commerce will emphasise on collaborative approach to support handicraft sector and offer support in skill development, technology ­upgradation, design innovation, infrastructure support, and ­marketing.

Artisans will also be encouraged by offering opportunities and financial support to display their art and products in national as well as international exhibitions.

Meanwhile, the policy envisaged increased women participation in order to promote the apparel sector. In this regard, the commerce ministry will review labour laws specially to allow women to work in three shifts.

The commerce ministry will take measures in consultation with private stakeholders and concerned government vocational training organisations to initiate mass level female-exclusive textiles and apparel training programmes especially in apparel stitching.

The commerce ministry will consider to link support measures to provide facilitation to women at workplace such as day-care center, pick and drop, etc.

Published in Dawn, January 10th, 2021

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