Pakistan’s textile exports could fall by $3 billion this year as compared to last year, the All Pakistan Textile Mills Association (ATPMA) has said, urging authorities to take an immediate and urgent intervention.
APTMA Patron in Chief Gohar Ejaz addressed a letter to Prime Minister Shahbaz Sharif on March 31 outlining his worries.
Ejaz stated that while the sector could readily generate $1.7 billion per month in line with exports generated last year, textile exports for February 2023 came in at $1.2 billion.
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According to him, an extra $5 billion in capacity has also been installed or is being installed. However, due to currency problems and the lack of electricity, it is still inoperable.
He stated that the fall in textile exports had been accelerating.
“Over 50% of the industry has been closed as a result of the moratorium on the import of raw materials and essential spare parts, a lack of an adequate supply of energy at reasonable prices, and a systemic failure of the sales tax refund programme.
“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 also requested that a standard gas price of $7 per MMBtu be applied nationwide for the export sector.
The report asked the authorities to reopen SRO 1125, Zero rating for the textile value chain while collecting sales tax on domestic sales at the point of sale, and to immediately refund all outstanding sales tax, tuff, and other dues.
Ejaz added that to restore the industry’s supply chain, the export-oriented sectors should be allowed to open Letters of Credit for raw materials, machinery, spare components, and other items without restriction.
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The letter comes as Pakistan’s economy is in dire straits, stricken by a balance-of-payments crisis as it attempts to service high levels of external debt amid political chaos and deteriorating security.
The country continues to experience a US dollar shortage, the rupee has fallen, and inflation has skyrocketed. These factors leave little room for imports, which has contributed to a sharp decline in the industry.
The APTMA chief, meanwhile, urged with the authorities in a letter to approve all imports from the export-oriented industry.