Pakistan's textile exports plummet 65%
in April 2020
Textile enterprises have demanded that the
government reopen all the textile industries along with the
restoration of the zero-rated sales tax status as textile
exports have been severely affected. In April 2020, textile
exports declined 65% to $404 million against exports of
$1,138.35 million in the same month of the previous year. “This
should set off alarm bells for the official quarters concerned,”
remarked All Pakistan Textile Mills Association (Aptma) Punjab
Zone Chairman Adil Bashir.
In the wake of a heavy fall in exports as
well as domestic sales of textile products, Bashir demanded the
restoration of the zero-rated status for the five major
export-oriented sectors to give a boost to the textile industry
in its endeavors to increase local production and exports and
save millions of jobs. He urged the government to take serious
measures to overcome the liquidity issues of the textile
Sales of all major textile categories
plummeted in April, with garments being the most affected.
Cumulatively, textile exports dropped 3% year-on-year in the
first 10 months of the current fiscal year to $10.82 billion,
said Research analyst Ahmed Lakhani.
Some improvement is expected in May as
shipping delays have been reduced. Moreover, buying countries
were also gradually easing the lockdown, which should support
demand recovery, he added.
In the prevailing situation, it is
pertinent to see what special incentives can be offered to the
export-oriented sectors. On the other hand, “the risk remains
that despite the incentives, a potentially severe second and
third wave of Covid-19 can neutralize any impact from the
government incentives,” commented the analyst.
The Aptma chairman said the trend of
exports in April 2020 was very frightening as Pakistan’s annual
shipments to EU countries and the US, exceeding $10 billion,
were fraught with risks due to delay and cancellation of export
orders after the coronavirus lockdown and liquidation or closure
of many retail chains. Pakistan Cloth Merchants Association
Secretary-General Arif Ismail urged the Sindh government to
allow all textile and allied industries to resume operations and
comply with the prescribed SOPs.
The Aptma chairman stressed that the
textile industry was the backbone of the country with more than
60% of total exports and the largest employer with widespread
employment for professionals, skilled and unskilled workers.
He said the zero-rated regime was
introduced in 2005-06 with declared objectives of eliminating
cash liquidity issues, wiping out refunds of billions of rupees
stuck for long, avoiding unproductive waste of man-hours in
chasing tax refunds and eliminating the additional cost borne on
the filing and follow-up of refund claims.