Exporters seek govt support to stem decline

Islamabad - Textile and clothing exporters have called upon the government to implement structural reforms and provide temporary financial assistance to halt the sector's decline and safeguard Pakistan's presence in global markets amid increasing international competition. At a high-level meeting chaired by Commerce Secretary Jawad Paul on Tuesday, exporters outlined their proposals and discussed challenges facing the textile industry.

The meeting reviewed issues and potential policy interventions to restore export competitiveness. Exporters requested structural reforms to address rising production costs, alongside immediate relief through a 6-8% drawback on local taxes and levies, contingent upon a 10% growth in exports. Subcommittees were formed to examine the industry's concerns and submit recommendations within 15 days.

The meeting included officials from various ministries, such as finance, power, petroleum, mines and minerals, the Federal Board of Revenue, the State Bank, and the Punjab Industries Department, as well as industry representatives from the Pakistan Textile Exporters Association, Pakistan Hosiery Manufacturers and Exporters Association, Pakistan Textile Council, and the All Pakistan Textile Mills Association.

A key issue discussed was the industrial electricity tariff, particularly the cross-subsidy burden that exporters claimed undermined their competitiveness. The discrepancies in power tariff calculations were acknowledged, with the Power Planning and Monitoring Company admitting to Rs26 billion of a Rs56 billion discrepancy. The matter would be addressed with the Power Division during a scheduled meeting.

Exporters also questioned the methodology used to calculate gas tariffs, particularly the treatment of unaccounted for gas losses, which they believed added to industrial energy costs. Additionally, anomalies in the Export Finance Scheme, including differences in rates, inadequate funding allocation to the corporate sector, and certain commercial banks' failure to implement the prescribed 4.5% fixed financing rate, were raised.

Exporters demanded corrective measures to ensure competitive export financing rates during a period of rising production costs and weakening demand in overseas markets. The meeting also addressed delays in tax refunds and other taxation issues involving the Federal Board of Revenue, which exporters stated had intensified liquidity pressures and constrained their ability to finance export orders.

Regarding labor expenses, industry representatives informed the meeting that overall human resource costs had reached $270 per worker, adding further pressure on manufacturers.