ISLAMABAD, Nov 1: Pakistan has decided to import $200 million worth of textile machinery and equipment from India during the current fiscal year, official sources told Dawn.
A decision to this effect was taken in Islamabad last week by Federal Textile Board (FTB) as part of a set of decisions on a multi-pronged strategy to enhance textile exports in the longer term and, in the short term, to offset the impact of $1.4 billion export loss following US-Afghan crisis.
The $200 million is a credit line provided by Beijing for Islamabad for this purpose. “The proposal for import of machinery from India was sponsored by All Pakistan Textile Mills Association, and the FTB, headed by Commerce Minister Abdul Razak Dawood, approved the request,” confirmed a senior official of the industries ministry.
Commerce ministry sources said that the minister had earlier discussed the proposal with President General Pervez Musharraf the same day and got a go ahead. The industries and production ministry will, however, work out technical details and specifications of the machinery and equipment import from India as per requirement of the Aptma, he said.
Pakistan required at least $500 million investment in the textile industry to meet export requirements by the year 2004. India, the sources said, has already indicated to offer machinery at rates that would be cheaper than anywhere else in the region.
A proposal to relocate second-hand textile machinery from the United States into Pakistan has also been under consideration for quite sometime though freight and other charges may not be feasible enough in that respect when compared with Indian prices, the sources said.
In the wake of trade liberalization, Pakistan targets to increase GDP to $90 billion from the current $65 billion. It planned to enhance textile exports from current $6 billion to $14 billion by the year 2005 to increase share of textile sector from current 7.5 per cent to 9 per cent of the GDP.
One of the decisions taken by the FTB was that the government would have a fresh and focussed dialogue with Canada, Australia, the United States, Bangladesh and China for increased exports and market access for cotton and polyester, official sources said.
Pakistan’s polyester exports declined by around 90 per cent during the first quarter of current fiscal year. Overall export loss is officially estimated at around $1.4 billion, a major chunk in the textile and cotton sector, against an annual target of $10.1 billion. A committee headed by Commerce Minister Abdul Razak Dawood, comprising Razaq Telli, Rasheed Soorti, joint secretary textiles of the commerce ministry, the textile commissioner and director Textile Quality Management Department has been constituted. The committee would submit well-researched proposals with analysis of the impact for negotiations with the United States, Canada and Australia to increase exports to these regions.
Simultaneously, Bangladesh would be engaged in fresh negotiations on the questions of increasing exports, redressing the issues like shipping and transit time and difficulties relating to letters of credit and repayments. The Export Promotion Bureau (EPB) has been directed to prepare a detailed paper for these negotiations.
Another delegation of government officials and businessmen is being put together from knitwear and ready-made garments sub- sectors for discussions with principal buyers in the US. The EPB has also been directed to develop regular reporting of information on principal markets to enhance exports.
A high-level delegation led by commerce minister along with businessmen would visit China in the last week of this month. The delegation would discuss with the Chinese authorities the exports of yarn, grey and processed cloth and polyester fibre. But before that, another delegation would visit China to explore market for synthetic/polyester fibre. It is expected that the two sides would reach formal understanding on market access to Pakistani polyester in China during the minister’s visit.
Another meeting with private sector textile and cotton stakeholders has also been convened on November 3 in Lahore to complete the unfinished agenda and review implementation status on these decisions.
To finalize a comprehensive strategy in the background of falling exports and its economic fall out “the meeting will focus exclusively on Cotton situation (National & International) and production of contamination free cotton, exportable surplus, role of Trading Corporation of Pakistan (TCP) and private exporters,” said a letter written to all the stakeholders.
