subject: Pakistan’s Textile Policy: Would It Be A Milestone? [print this page] Author: F2F Author Author: F2F Author
Textile industry in Pakistan has a total established capacity of spinning around 1550 million kgs of yarn, weaving 4368 million sq meters of fabric, and finishing capacity of 4000 million sq metres. It provides 38% of the total industrial employment, contributes to 62% of its exports, and 27% to the industrial value addition. The sector contributes to nearly 8.5% to GDP. Pakistan has a dynamic export oriented textile industry, generating the highest export earnings of the country. 9 million bales of cotton are produced every year making it the fourth biggest cotton producer in the world . Currently there are a multitude of issues facing the industry. It needs to enhance its product quality, upgrade the technology, and encourage appropriate research and developmental activities. High interest rates, cots of inputs, and non-guaranteed energy supplies also hinder the competitiveness of the industry. Increasing interest rates have seriously affected small owners, while hindering in the growth of textile tycoons. Due to the global meltdown, textile exports of Pakistan were down by 9.5% during 2008. Textile owners felt it was imperative for the Government to take actions that would result in a positive impact on the industry. First Textile Policy: The Pakistan Government announced the first ever textile policy, 2009-2014, considering the exports of the country. Chaired and approved by the Prime Minister Yousaf Raza Gilani, it aims to enhance the existing 10 billion USD exports to 25 billion USD by 2015. The challenges faced by the industry during the quota-free trade regime are optimistically believed to be suppressed by the policy. The policy enables an amount of 42 billion rupees in subsidies, and incentives during the fiscal year 2009-2010. Export refinance is reduced at a rate of 5% with a Rs. 2.5 billion allocation. Rs.5 billion is allocated as a relief on the existing long term loans of the textile industry. Duty drawbacks are offered between 1 to 3% for a period of two years for value added textile exports which will aid the industry to offset both its direct, and indirect costs. It also exempts the industry from lead shedding and allows it to have a prioritized gas supply. A Technology Up gradation Fund (TUF) is proposed to contribute around 20% of the capital cost as a grant. The Government has currently allotted Rs.1.6 billion for this, will is planned to be increased to Rs.17 billion by 2014.About the Author:
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