Haroon, FCCI discuss rising industrial costs

A crucial meeting took place at the Faisalabad Chamber of Commerce & Industry (FCCI) involving Haroon Akhtar Khan, Adviser to the Prime Minister and Federal Minister for Industries and Production. Representatives from the Pakistan Hosiery Manufacturers & Exporters Association (PHMA) North Zone, Central PHMA, and former PHMA Chairman attended the discussion. They deliberated on expanding textile exports, the increase in industrial costs, and the challenges confronting exporters.

Mian Farrukh Iqbal, PHMA North Zone Chairman, underscored the role of Pakistani diplomatic missions and commercial counsellors abroad in promoting the nation's exports. He suggested that the government utilize these missions effectively by engaging commercial counsellors in direct communication with foreign buyers, identifying new markets, and generating business opportunities.

However, exporters often encounter difficulties in contacting these counsellors, with responses sometimes delayed by up to three months. He urged the government to enhance these counsellors' performance, strengthen their engagement with exporters, and promote Pakistani products globally. Haroon Akhtar Khan, acknowledging the concerns raised, assured the delegation of follow-up meetings to address exporters' issues and explore solutions.

Syed Zia Alamdar Hussain, Central PHMA Chairman, pointed out a substantial rise in industrial input costs over the past four years. He detailed a 70 percent increase in electricity prices and a 100 percent increase in gas prices, alongside a 48 percent surge in costs related to minimum wages, social security, and the Employees’ Old Age Benefits Institution (EOBI).

Simultaneously, the US dollar exchange rate dropped from approximately PKR 315 to around PKR 277, reducing exporters' earnings in rupees and their competitiveness in international markets. He also noted that the value-added textile sector has been without the Drawback of Local Taxes and Levies (DLTL) facility for several years. He advocated for a 6 percent to 8 percent DLTL rate to boost exports and maintain Pakistani exporters' competitiveness globally.

Kashif Zia, former PHMA Chairman, highlighted a significant development concerning export logistics for Inditex, a leading global retail group. He explained that cargo destined for Inditex currently travels from Lahore and Karachi to Europe via Doha and Dubai, with stops in Qatar Airways and Emirates, respectively. He proposed direct cargo flights from Lahore and Karachi to Europe, which the airports had been audited to meet European Union standards.

Zia expressed gratitude to Rana Ehsan Afzal of the Ministry of Commerce for maintaining coordination and Mudassar Raza Siddiqui, Director General Textiles, for their contributions. The audit process was ongoing, but he expressed optimism about a favorable outcome for Pakistan, as it could enable direct shipping to Europe, reducing transit time and improving logistical efficiency. This development was seen as a significant step for Pakistan's export sector.