MFN move to hurt textile industry
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The Pakistan Economy Watch (PEW) on Sunday said MFN status to India will damage local value-added sector which is providing jobs to millions and contributing more than any sector to the export earnings.
Rising input costs, burden of taxes, infrastructure issues, lack of enabling rules and regulations, deteriorating law and order situation and extortion has increased cost of doing business substantially, it said.
Our production is restricted, exports are shrinking and we stands at disadvantage as far as economy of scale and government’s support is concerned, said Dr. Murtaza Mughal, President of the Pakistan Economy Watch (PEW).
He said that instead of moving forward with the value addition, country is going backwards by exporting more of the raw materials like cotton and yarn.
All regional countries are following good practices, paying hidden subsidies while India allows export of surplus cotton only which results in stability for value-added sectors; Pakistan should also follow such enabling policies, he said.
Dr. Murtaza Mughal said that a proper regulatory policy for cotton and yarn exports can save one of the most important small scale industry from losing its share to Bangladesh, Sri Lanka, China, Vietnam and India. This can reduce closures and bankruptcies, he added.
Pakistan cotton and textile exports stands at $14 billion while Indian exports have touched $24 billion, up to our total exports, he said.
He said that government should immediately release local levies drawbacks amounting around Rs 25 billion, held since two years.
Pakistan ranks lowest in the region as far as profit per cotton bale is concerned, he informed. He stressed the need for Joint ventures with foreign apparel manufacturers and technology upgradation.
