Page 14 - TEXtalks International July/August 2022

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Textile sector losing big orders

amid energy shortage: APTMA

A recent fluctuation in dollar price, political instability, skyrocketing prices of energy, and load shedding is
causing vows across Pakistan's textile sector. All Pakistan Textile Mills Association (APTMA) urges the federal
government to urgently solve the issues mentioned above to the textile industry, stressing that a loss of
almost $1 billion in exports has already been incurred because of it. Earlier, the 26% upsurge in the export of
textiles during the fiscal year 2021-22 was made possible due to the energy supply at a regionally
competitive tariff and the government's textile-friendly policy.

It is inexplicable that the exporting sector, which has pledged to increase textile exports to $25bn by
2022-23, is being denied energy and gas. However, it is becoming inevitable to solve these issues for the
survival of industries.

Pakistan's textiles have a 61% share in the country's exports and 40% of manufacturing sector employment.
The country's fragile economy cannot sustain the consequences of the closure of mills in the wake of the
non-supply of gas. If the situation persists, more than 50% of output would be lost during upcoming months,
with a very high risk of permanent order loss and buyer diversion from Pakistan to its competitors.

Govt to resolve issues

of the garment sector

The government has assured the Pakistan over the years and it has been the best performing
Readymade Garments Manufacturers and segment of the textile value chain, the sector is
Exporters Association (PRGMEA) to resolve their grossly underperforming relative to its potential.
issues on a priority basis. According to a press Pakistan lags behind its competitors in the global
statement issued by the finance ministry, the share of export of garments.
minister stressed the delegation to enhance the
country's exports. Earlier, the delegation members Pakistani export's underperformance can be
highlighted garments' contribution to Pakistan's attributed to supply, demand, and investment
exports. They apprised the minister of issues climate constraints. Pakistan faces higher
related to taxation on value-added garments, refund production costs and lower productivity compared
of Sales Tax, and others. Issues of deferring to its peers. High production costs include import
payments, Drawback of Local Taxes and Levy duty on cotton & MMF, high energy tariffs, and
(DLTL), and GSP plus status were also discussed in minimum wage (Supply-Constraint). With this
the meeting. guarantee from the government, there is a
possibility that the sector can increase exports and
Although garment sector exports have increased support the country's GDP.

July/August 2022