ISLAMABAD: After slashing the prices of petroleum products, newly appointed Finance Minister Ishaq Dar may take another decision and consider a hefty package of subsidies on energy for the textile sector to help it compete with regional countries.
The decision is expected during a meeting between the minister and textile exporters on Thursday, Pakistan Textile Exporters Association’s (PTEA) patron-in-chief Khurram Mukhtar told Dawn on Monday. “Finance Minister Ishaq Dar called PTEA for a meeting concerning energy tariff,” he said.
Since July this year, the PTEA held three meetings with former finance minister Miftah Ismail to sensitise the government about the rising energy cost in the country which rendered textile exports less competitive in comparison with the regional countries.
In the budget for fiscal year 2022-23, the government has set aside Rs20 billion as subsidy on electricity for the export sector and another Rs40bn on gas supply to the industrial sector.
“We want some practical mechanism to make the textile sector more competitive,” Mr Khurram said.
A regionally competitive tariff was given to the textile sector in December 2015, he said, adding that the PTEA had pleaded the case for the entire textile value chain and accordingly the then government recommended $1.20 per mmBtu subsidy on gas which was later extended to all the exports sector.
“It took us at least four years to gain back share in the global textile market,” Mr Khurram said. “There is a huge opportunity for the textile exporters to increase the volume of country’s exports to $35 billion over the next five years, subject to remaining competitive.”
Following the devastating monsoon rain hitting cotton areas, the PTEA has approached the federal government, asking the latter to allow the import of cotton from India via the Wagah border to meet the rising export orders.
Exporters say early estimates show that 25 per cent of the standing cotton crop have been damaged and there is a possibility of a raw material shortage in the country.
“We may need to import 2.5 million bales of cotton from India,” Mr Khurram said, adding that it seemed to be the only viable option with lower logistics costs.
In the first two months of the current fiscal year, the textile group posted a paltry growth of 4.18pc compared to the same period a year ago. In August, the growth of the textile group was over 7pc, indicating hopes for a revival of exports from the country.
Published in Dawn, October 4th, 2022