Pakistan Agriculture News

Govt serious to make garment industry competitive

LAHORE  –   Adviser to prime minister on commerce, textile, industries and production and investments, Abdul Razak Dawood has said the government is taking all necessary measures to make the value-added textile industry competitive and vibrant in the international market.

He was talking to the delegation of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) which met him at his office under the lead of its central chairman Mubashar Naseer Butt.

The PM Adviser assured the delegation that a level playing field would be provided to the zero-rated export industry. PM advisor said that the good thing is that due to right policies of the government, the economy of the country would improve in the months to come as exports are now improving.

Razak Dawood said that economy of the country would improve in the months to come, reiterating the value-added textile products could earn plenty of much-needed foreign exchange for the country. He said that the government is faced with multiple challenges, but it would make organized efforts to face them successfully and lift the living standard of the people.

On this occasion, the PRGMEA leadership made a detailed presentation to PM Advisor and suggested him the way forward to take the industry out of crisis and how to increase country’s exports.

PRGMEA chairman Mubashar Naseer Butt observed that value-added garments sector has shown 11.22 percent growth in 2017-18 despite the internal and external challenges. The sector is the major tax payer, largest employment generator in the whole textile chain and exporting up to $5.5 billion textile products.

He urged the advisor to work on rationalizing duty structures and minimize taxes and duties on import of raw materials. The ministry should also hold a meeting to simplify DTRE Scheme, he demanded.

He said the ministry should also discourage export of raw material and encourage export of value-added items. He reiterated the request of value-added textile exporters to the State Bank of Pakistan to facilitate exporters’ authorized dealer to make import advance payments against irrevocable Letters of Credit (L/C) up to 100 percent of the value of the goods and up to $10,000 per invoice for the import of all eligible items without the requirement of L/C or Bank Guarantee from the supplier abroad.

It is requested to cancel the 14th July 2018 circular with immediate effect, as you already resolved it at the last meeting held on 6th September, 2018, the chairman added. Regarding Procedure for the DDT 2018-21 Scheme, the chairman requested the government to announce complete 100 percent drawback rate of incentive without the condition of increment with simple procedure and paperless working. Expressing concern over extreme cash flow crunch, Mubashar Butt asked the government to announce a clear policy to finally clear all the pending refund claims (i.e. DDT 2016-17 (7 percent), DDT 2017-18 (3.5 percent without increment and with an increment), Customs rebate, Sales Tax etc.) within stipulated time.

Government should also clear old Duty drawback claims of exporter for the period 2009-2012 as these claims are pending since long, he added.

The PRGMEA leadership requested that the bank should support the exporters in a way that first they ensure 50 percent banking compliances in 2019 and a further 25  percent may ensure in the next year and so on.

They complained that at the moment, different government agencies are harassing the textile industry virtually every day. Social Security, EOBI and all other taxes should merge and deducted at source, they demanded.

PRGMEA chairman also extended an assurance on behalf the value-added textile industry by supporting the government in achieving its target of economic growth and overcoming the unprecedented trade deficit.