Raza Khan

Pakistan’s textiles exporters have demanded the government announce a relief package for the industry to control the decline in exports. “The government must ensure the provision of electricity and gas to the textile industry on regionally competitive energy tariff,” Shahid Sattar, Secretary General of All Pakistan Textile Mills Association (APTMA), said while talking to WealthPK.

Sattar said that the textile mills must be provided electricity at Rs19.99 per unit and gas at $7 per MMBtu to make the industry regionally competitive. He informed that a decline of 28% has been recorded in the country’s textile exports in February 2023. “Shortage of raw material, currency depreciation and energy crisis are the major reasons behind the decline in exports during last few months,” he pointed out.

The APTMA secretary general demanded that instructions should be given to all the banks for clearing letters of credit (LCs) which relate to the import of raw materials for the textile sector. “Textile industry is a major contributor to Pakistan’s economy, and this decline in exports will have a significant impact on the overall exports,” Sattar said, adding that the government should also incentivise exporters by reducing interest rates.

He said that the decline in textile exports was also worrisome for the workers employed in the industry, many of whom have already lost their jobs. The APTMA secretary general also urged the government to formulate a long-term strategy for fixing the country’s economy permanently.

Sattar acknowledged that a decline in demand for textile products in major markets like Europe was also a reason behind falling exports. However, he said, that actual problems are within the country. According to data (provisional) released by APTMA, Pakistan’s textile exports declined by 28% in February 2023, making it the fifth consecutive month of negative growth. Exports in February dropped to $1.20 billion from $1.67 billion during the corresponding month of last year.

The country’s textile exports also fell by 11% during the first eight months (July-February) of the fiscal year 2022-23. Pakistan’s textile exports dropped to $11.24 billion during July-February FY23 from $12.60 billion during the same months of 2021-22. According to APTMA data, textile exports dropped by 15%, 18%, 16%, 15%, and 28% during October, November, December, January and February, respectively.

Pakistan’s overall exports also dropped by 18.67% during February to $2.305 billion against $2.834 billion during the same month of last fiscal year. Pakistan Textile Exporters Association (PTEA) has also said that economic slowdown in the country had impacted exports in a negative way. “The main crisis is the falling foreign exchange reserves,” PTEA said in a statement.

It said the country’s textile industry was operating at less than 50% of its actual capacity, and many of jobs had already been lost. “Textile industry is under stress due to high cost of doing business, and it is also at a comparative disadvantage in respect of production cost in the region,” the exporters’ association said.

Textile exports are the major contributor to the country’s overall exports, and textile sector hosts over 50% of the industrial workforce. Textile exports in 2021-22 accounted for 60.92% of the country’s total exports of $31.76 billion. According to Textiles and Apparel Policy 2020-25, textile export target for current year has been set at $25 billion.

Credit: Independent News Pakistan-WealthPk