The draft of Pakistan Textile Policy for 2020-25 with four tier strategy and 21 recommendations is all set to be pitched any time before the ECC (Economic Coordination Committee) for approval. It will try to increase the country’s textile exports target by 2025 to $25.3 billion and $50 billion by 2030. It was $13.33 billion in 2018.
The draft of Textile Policy also spells out its the objectives which include:
– Restoring profitability of cotton farmers by increasing cotton yield, improving quality of cotton and decreasing cost of production for the farmers.
– Strengthening manmade fiber/filament sector to make this chain internationally competitive and export oriented.
– Regionally competitive energy pricing fixed for five years.
– Prompt Sales Tax Refund System.
– Abolition of Zero- Rating has created serious liquidity crisis for exporting sectors as the current refund system is soaking up market liquidity and is not working.
– Long Term Financing Facility for the entire textile value chain.
– Revival of impaired textile capacity and introduction of bankruptcy law
– Establishment of Textile clusters and Export Processing Zones with plug and play facilities.
Pakistan was once a leading player in textile trade but over the last decade, our textile sector growth has remained dismal.
Two decades back, Pakistan’s textile exports were ahead of its regional peers like Bangladesh, Vietnam and Cambodia. In 2003, when Pakistan’s textile exports were $8.3 billion, Vietnam’s textile exports were $3.87 billion, Bangladesh’s were at $5.5 billion.
The graphs and tables mentioned in the Textile Policy show that growth in textile exports in FY20 will be at $14.66 billion, in FY21 $16.13 billion, in FY22 $17.90 billion, in FY23 $20.05 billion, in FY24 $22.46 billion and FY25 the textile exports will be at $25.38 billion. And summarily in the next five years, from 2025 onward to 2030, the textile exports will be at $50.15 billion.
It also highlighted the investment required to achieve the export growth target, saying that Pakistan’s investment-to-Gross Domestic Product (GDP) ratio has been hovering around 15pc while countries like China, India and South Korea have maintained the ratio above 30pc to put their respective economies on a sustainable path.
The draft also comes up with 21 recommendations to achieve the textile export of $25.3 billion by 2025 and $50 billion by 2030. It asks for the continuation of the provision of RLNG at $6.5 per MMBTU and electricity at 7.5 cents per unit, which is at par with energy cost of exporters of regional competitors such as Bangladesh, Vietnam and India for growth in exports. The provision of energy at the said cost would ensure Pakistan’s products in international market at competitive rates. It advocates for the regionally competitive pricing for the whole textile chain with removal of implementation hurdles.
