There is no doubt that textile industry is one of the significant sectors of the Pakistani economy. It has major contributions in the GDP of the country but for the past few years, there has been a decline in the overall growth. This was primarily due to the taxes and duties applied to the imports of the industry.
It is bitten fact that these duties and taxes levied by the government on the textile exports have adversely affected the industry, especially during the past four years. In January 2017, the government finally announced the package of concessions and rebates exclusively for this industry which encouraged the textile exporters to improve their production rate and exports. This helped to improve the market share of Pakistani textiles in the international textile market.
Reduction in tax rate and duties by the government
The federal government has been trying to lift the sector by lowering the rates of taxes and duties which has positively impacted the overall performance of the textile industry. The government’s efforts to keep the imports at an average level and make improvements in the various sectors of the industry seem to be fruitful. As a result of these efforts, textile exports have begun to show an upward trend. A 7.2% rise has been witnessed in the fiscal year 2017-2018 which equals to 8.79 billion dollars. This is good news for the textile industry.
A major contributor to country’s exports
According to the various news reports and industry insights, the textile exports comprise of the 60% of the total exports of the country during the last fiscal year which is the major chunk. The growth and facilitation of this sector is, therefore, necessary to uplift the economy of the country.
During that period, there has been 13.3 % rise in the knitwear exports, 13.1% in the readymade garments exports, 4.5% growth in the bedding and bed linen, however, the growth of cotton cloth export remained nearly the same as before.
On the other hand, the government is also striving to discourage the imports but necessary imported materials still need to be imported such as petroleum products, latest machinery, insecticides, pesticides, medicinal goods etc. in different quantities in order to meet the requirements of the domestic industry.
Petroleum products and machinery take the major toll on the industry’s imports. Therefore it is necessary that the government should make efforts to accelerate the local exploration and production of oil and allied products. At the same time, the technical textile machinery industry should be supported and innovated machinery should be produced within the country to lower the burden of international textile machinery on the textile industry as well as the economy. The government should encourage the companies to open their machines production units within the country offering them special subsidies and facilities to support them.
The textile mill owners should also be encouraged by launching official campaigns to conserve the resources and to avoid the unnecessary journeys keeping it in their mind that valuable foreign exchange resources are spent on the imports and their foreign tours. They should be given awareness and knowledge about how to explore their local resources to the maximum for their production units. These steps will help to further lower the imports and flourish industry’s growth.