The most awaited Textile and Apparel Policy 2020-25 is finally up for approval as the Economic Coordination Committee (ECC) of the Cabinet has taken it up for review. Chaired by Finance Minister Dr Hafeez Shaikh, ECC will be taking 5 important political decisions regarding the policy in the meeting.
The most important decision regarding the policy is bringing back the zero-rating for the five export-oriented sectors. Once the policy is implemented, for the coming five years, the government is responsible yield support at four percent to garments and technical textiles, 3pc to made-ups.
The EFS at a rate of 3pc will continue for the next five years. The amount proposed for the scheme is Rs109bn. The total amount to be spent in these five areas is estimated at Rs958bn. The allocation of this amount will be spread over five years.
Moreover, In the next 6 to 12 months, tariff rationalization of the textile and apparel value chain will be carried out alongside of the simplification of temporary importation schemes. The system will also be upgraded therefore providing the LTFF to indirect exporters and drawback duty rates.
The goal of the implementation of this policy is to get back on our feet after the downfall that the Covid – 19 pandemic brought with itself in the lockdown. Disruptions in the global supply chains, affected global prices of commodities, hitting trade adversely, the cases of withdrawal of the SRO-1125 will also be acknowledged.
It is expected that the policy will bring in growth for the value-added textile industry in the form of foreign as well as domestic investments and this will help target the growth in the small and medium enterprises (SMEs).
