The All Pakistan Textile Mills Association (APTMA) has warned that Pakistan’s textile exports may decline by $3 billion this year compared to previous year and has urged the government to act immediately.
APTMA Patron in Chief Gohar Ejaz wrote a letter to Prime Minister Shahbaz Sharif on March 31 outlining his concerns.
Ejaz claimed that while the sector could easily earn $1.7 billion per month in line with shipments realized last year, textile exports for February 2023 came in at $1.2 billion.
According to him, an extra $5 billion in capacity has also been installed or is being installed. But, due to currency problems and the lack of energy, it is still inoperable.
“The decline in textile exports has been progressively accelerating,” he said.
“The progressive decline in exports is a consequence of the moratorium on import of raw materials and essential spare parts, lack of adequate supply of energy at competitive prices and failure of the sales tax refund system, all have contributed significantly to the closure of over 50% of industry.”
“Given the trajectory of decline, Pakistan is likely to fall short by $3 billion in textile exports from the exports achieved last year of $19.4 billion without taking into account any increase from newly installed capacity,” warned Ejaz.
APTMA demands for Textile Exports Sector
APTMA also demanded that a uniform gas price of $7 per MMBtu be applied nationwide for the export sector.
The document requested the authorities to reinstate SRO 1125, Zero rating for the textile value chain while collecting sales tax on domestic sales at the time of sale, and to promptly refund all outstanding sales tax, VAT, and other debts.
Ejaz added that in order to reestablish the industry’s supply chain, the export-oriented sectors should be permitted to open Letters of Credit for raw materials, machinery, spare parts, and other products without restriction.
The letter is being sent at a time when Pakistan’s economy is in terrible shape and is experiencing a balance-of-payments problem as it tries to pay off a sizable amount of external debt amidst political unrest and deteriorating security.
The country continues to experience a US currency shortage, the rupee has fallen, and inflation has surged. These factors leave little room for imports, which has led to a sharp reduction in industry.
The APTMA chief, meanwhile, pleaded with the authorities in a letter to approve all imports from the export-oriented sector.
To read our blog on “Textile industry has laid off 7M people, association claimed figures,” click here.
