April 20, 2024

Pakistan Textile Sector Drafts Plan To Reach $50bn In Exports

The Pakistan textile industry has submitted an ambitious plan to the government to achieve a US $50 billion export target in textile and apparel exports.

The industry has submitted a list of recommendations for removing barriers and providing incentives to reach the target to the Export Advisory Council for Textiles.

In a presentation, the industry has suggested setting up of 1,000 garment factories so that export volumes can be increased as well as diversify the export basket.

The plan entails setting up of factories with 500 sewing machines each, at an investment of $5 million which will produce and export garments worth $20 million per year, as well as generate 1,000 jobs

The presentation also proposed a ‘no-cost-no-commitment’ incentive package, with proposals like free office spaces for international brands and retailers to encourage their physical presence in Pakistan.

The proposal pointed out that the cost of first six months should be covered through upfront financing from the Export Development Fund along with a rebate of 0.1 percent of the sourcing value.

The presentation highlighted that the US clothing industry was shifting sourcing from China with a strategy called ‘China Plus’ and find other sourcing destinations.

And if sourcing would shift out of China, then Chinese garment factories would set up plants in other countries and that Pakistan should present itself as an attractive alternate destination.

This would provide a fillip to also the Pakistan textile industry as they could become suppliers of choice for these Chinese garment factories.

The Pakistan textile industry also urged the government to announce a separate power tariff category for exporters, excluding cross-subsidies, stranded costs and other inefficiencies.

It called for ensuring adequate supply of re-gasified liquefied natural gas (RLNG) or locally produced gas at regionally competitive prices and transition to zero emissions for exporting industries.

“Net zero greenhouse gas emissions are required across the value chain to continue exporting to western markets beyond 2030,” the presentation stated.

The industry has sought exemption from sales tax for export sector inputs to become globally competitive.

The presentation also called on the Federal Board of Revenue to process refunds faster and adhere to the promised 72-hour time frame.

The industry also suggested setting up of free commercial zones with simplified procedures to facilitate exports, reduce turnaround time and centralise export-related services.

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