After the government imposed a 17% sales tax
on the textile sector, the owners of the processing industry
called for strikes in factories and refused to cooperate with
other stakeholders within the textile industry.
The All Pakistan
Textile Mills Association (APTMA) Chairman Syed Ali Ahsan has
urged the government to end post budget uncertainty, which is
impacting production, employment and exports in the country
The value-added sector
argues that they could not compete globally if they bought basic
raw material at higher price. They claim surprise at the higher
cost of yarn despite devaluation and government concessions in
energy and power prices received by the basic textile industry.
According to the
All-Pakistan Sizing Association, the textile sector works in
different phases. The association is working to understand how
the imposition of 17% sales tax will impact the textile sector
The previous five-year
Textile Policy 2014-19 was expired in June 2019. The government
has, however, failed to achieve the target of doubling
value-added textile exports to US$ 26 billion under the policy.
According to textile
experts, the main issue is the government’s lack of support in
comparison to competitors like Vietnam and Bangladesh. Vietnam
is 17% duty free to the US, whereas Bangladesh has the same
situation as Pakistan with Europe, with the added benefit of
lower wages, leaving Pakistan with little advantage.
President Arif Alvi
said the textile sector is the economy’s lynchpin, contributing
60% of the country’s exports and 40% of industrial employment.
He told this to a delegation of the All Pakistan Textile
Processing Mills Association (APTPMA) in Faisalabad. Despite
tough economic conditions, he assured measures would be taken to
improve the economy.
The textile exports
from the country during July-May 2018-19 were recorded at $12.31
billion as compared to the exports of $12.32 billion during the
same period of last year, showing a nominal decrease of 0.09%,
according to the latest data of Pakistan Bureau of Statistics
The Ministry of
textiles has paid Rs 44.5 billion to the local textile industry
under Prime Minister’s Exports Enhancement Package since July
2017, with an objective to help boost exports from the country,
said a senior official in the ministry.
The textile sector has
not been happy lately with the decision of the government to
remove the zero-rated status granted to the industry. But the
government has lost patience with hoping for textile exports to
record any meaningful increase.