In this regard, a presentation was made by the Pakistan Textile Exporters Association Chairman, Rana Arif Tauseef, to the Federal Textile Industry Minister, Mushtaq Ali Cheema, at a largely attended meeting of exporters the other day.
The PTEA chief made a pointed reference to exports of textile fabrics amounting in June this year to 328 million square meters, but, thereafter, dipping month over month, until October when they stumbled down to 204 million square meters, in a sharp decline of 24 percent over the preceding month, thereby causing an eventual fall of 38 percent in the first four months of FY06 against June 2005.
As for the factors contributing to such a sharp quantitative decline in fabrics exports, mention was made of the rising cost of inputs like electricity, gas, POL products, and high cost of financial credit, ranging up to 18 percent, besides excessive taxes and levies on exports.
Among external factors, reference was made to tariff barriers of anti-dumping duty, and custom duty in the European Union. As such, while internal factors have been seen as escalating production cost, external barriers left Pak textiles non-competitive in the international market, as evidenced by the decline of 16.3 percent in textile exports to the European Union up to August this year.
More to this, citing export facilitation disparities in South Asian region among other adverse factors, comparison was drawn with Bangladesh, specifically pointing to the 10-year tax holiday enjoyed by the exporters there, as against 1 to 1.5 percent income tax in Pakistan.
Moreover, it was contended that, unlike in Pakistan, there are no levies for old-age benefit, social security, and gratuity in Bangladesh, where labour is cheaper and import of raw material and spare parts is allowed duty-free.
Again, better prospects for exporters in China and India have been traced to availability of inputs at concessional rates, besides other incentives, while Pakistani exporters were left to grapple with sales tax, customs, and several other levies.
Viewed in this perspective, an earlier report, pointing to serious thought being given by a number of hosiery units, to shift and relocate outside the country due to the setback to their exports, will make it appear that all is not well with export prospects of the national textile industry.
This is confirmed by the reported dismay of the Pakistan Hosiery Manufacturers Association, over the plight of knitwear units whose contribution to exports was $1.6 billion in 2004-2005, but which are now stated to be closing down because of high rates of utilities and heavy incidence of taxation.
According to Jawad Bilwani, Chairman, Pakistan Hosiery Manufacturers Association, with production costs in these industries unabatedly on the rise, it is becoming increasingly difficult for them to compete in the international market with the neighbouring countries - Bangladesh, India, Sri Lanka and China.
Hence, an understandable inclination to relocate their units in Bangladesh, Sri Lanka and Nepal, to avail of the business-friendly atmosphere and rewarding facilities they offer to foreign investors. Needless, as such, to point out, Pakistani exporters of textile fabrics will appear to be confronted with a host of problems that need to be effectively addressed to ensure competitiveness in the international market on a firm and lasting basis.