ISLAMABAD: Textile and clothing exports posted a modest growth of 0.93 per cent in FY24, indicating that the sector may not be able to compete with regional rivals due to the implementation of harsh taxation measures in the current fiscal year.
The impact of the highest-ever energy cost is evident in the export results for June, which fell 3.91pc from the previous year, according to Pakistan Bureau of Statistics data issued on Thursday.
Former commerce minister Gohar Ejaz told Dawn on Thursday that textile and clothing exports have stayed the same in the last two years despite having a $25 billion installed capacity. He added that exports from the same sectors had been static for the past two years.
Mr Ejaz stated that to increase the country’s exports, the government must give competitive energy rates, drawbacks on taxes, and sales tax refunds.
Taxation measures may hurt sector’s performance in 2024-25
In absolute terms, textile and clothing exports up 0.93pc to $16.55bn in FY24 from $16.50bn in the corresponding period of last year.
In June, the export proceeds of textile and clothing fell to $1.41bn, a decline of 3.91pc from $1.47bn over the corresponding month of last year. On a month-on-month basis, exports dipped 9.23pc.
The government has introduced various measures, including increasing the tax rate on exporters’ personal income in 2024-25. The impact of these measures will be visible in the coming months.
The PBS data showed that exports of readymade garments rose 2.05pc by value in FY24 and 1.99pc by quantity, while knitwear dipped 0.66pc by value but grew 41.44pc by quantity. Bedwear posted a growth of 4.12pc in value and 15.27pc in quantity.
Towel exports rose 5.55pc in value and 14pc in quantity in FY24, whereas cotton cloth went down by 7.72pc in value but rose 16.15pc in quantity, respectively.
The import of textile machinery declined by 5452pc in FY24, indicating that expansion or modernisation projects were not a priority.
Oil imports
PBS data showed that oil imports dipped by 0.61pc during FY24 to $16.91bn from $17.01bn a year ago. During July-June, the import of petroleum products fell by 12.91pc in value and 7.09pc in quantity. Crude oil imports increased by 15.74pc in quantity while the value increased by 11.80pc.
Mobile phones
Mobile phone imports surged by 233.10pc to $1.89bn in FY24 from $570.07m over the same period last year, representing the largest share of overall machinery import value in FY24. Other mobile apparatus grew 20.94pc to $467.56m in FY24 from $386.62m last year.
Published in Dawn, July 19th, 2024
