Lahore December 23 2022: Textile exports are expected to decline to under USD 1 billion a month from
January 2023 as sector is now operating at a capacity utilization of less than 50% across the Country and appeal to Prime Minister to continue support for the sector.
Pakistan’s economy to a very large extent depends on textile exports for foreign currency and employment. International economic situation primarily caused by the Ukraine crisis combined with the floods in Pakistan have combined to formulate the perfect storm for our economy. Under these circumstances we request your kind attention to the issues highlighted below to enable the export oriented sector to continue contributing the maximum possible support for the Balance of Payments as well as employment for the people of Pakistan.
A very substantial number of jobs have already been lost and many more are to follow if remedial measures are not urgently undertaken. This is because of (a) Supply Chain Disruptions, (b) Working Capital/Liquidity Constraints, (c) Moratorium on Debt, (4) gas/RLNG shortages and prices and (5) Non- Functioning of New Project Expansions.
APTMA urges government to clear all imports of Export Oriented sectors which have arrived at parts whether against LICs or cash against documents, priority for and exempting Export Oriented sectors from import controls allowing
LCs for raw material machinery, spare parts and other items to restore industry’s supply line and refund all Demurrage and Detention Charges incurred by EOU Sector to maintain competitive costs for exports.
APTMA request to restore SRO 1125, Zero rating for the textile value chain while collecting sales tax on domestic sales at point of sale, immediately refund all deferred Sales Tax, Tuff and other dues and extension in submission date of Duty Drawback claims for FY 21 to resolve liquidity issues.
APTMA further requests to implement Weighted Average Cost of Gas while extending RCET across the country to enable new industrial units, expansions and Punjab based industry to compete, accord first priority to Export Industry on Gas/RLNG supply, allow competitive tariffs to all new projects and expansions, a new Export Sector working capital lending facility be established catering to EOU sectors at subsidized rates to tide over the current crisis and maintain a 24 hour help desk to monitor and resolve exporters issues to make gas pricing and availability competitive.
Over the past 2 years the textile sector has invested $5 billion (Rs. 1 trillion) in setting up new factories, some of these are now complete and the others are in process however some of the machinery of new plants/ expansions is still stuck at ports, L/Cs are being delayed for spare parts, and electriCity and gas is not being provided to these new units. If remedial action is not taken non-functionality of this new investment; instead of increasing exports by $ 5 billion per annum is likely lead to massive banking defaults, complete loss of investor confidence in future for any investment in Pakistan with many other negative consequences.
Machinery that has arrived at ports and is not being cleared delaying projects and incurring capital costs to a level where they have become uncompetitive. Gas /RLNG at competitive rates is not being extended for new connections
effectively rendering new projects/expansions uncompetitive.
a) Moratorium on capital repayment from July 1st, 2022 to June 30th, 2023.
b) Shipments of machinery and spare parts which have arrived at ports or are
at sea to be cleared.
c) Extend R.C.E.T to all new projects and expansions.
d) LTFF be provided where L/C’s already opened and loans approved by banks.
