Textile industry cautions govt against losing ‘golden opportunity’

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While India’s textile industry is all set to capture $20 billion (Rs3,086 billion) market opportunity created by shutdown in China in the wake of coronavirus outbreak and Bangladesh and Vietnam are also gearing up to make sure their share, but Pakistan’s textile industry is struggling for the implementation of most inclusive electricity tariff of 7.5 cents per unit as the Power Division has included more surcharges in the bills due to which power tariff for export industry has truly gone to 13 cents per unit.

This situation will not only make Pakistan’s textile products in international market non-competitive, but also make industry vulnerable enough never to grab the ability created in world market because of China shutdown and if the tariff of 13 cents per unit continues to appear in bills then there is fear that process of deindustrialisation may begin, triggering massive unemployment and unrest in the country. It is the essence of the letter compiled by Executive Director All Pakistan Textile Mills Association (APTMA) Shahid Sattar to Abdul Razak Dawood, Adviser to Prime Minister on Commerce, Textile, Industries and Production and Investment written on Friday.

According to a copy of the letter with subject ‘Golden chance to increased export market share being squandered’ APTMA mentioned that Indian Textile Secretary Ravi Capoor has needed the textile industry of India to rally and grab the opportunity created by the shutdown in China. In this connection, the federal government of India is extending all possible support to the industry to fully capture as a lot of the estimated $20 billion market exposed. Bangladesh and Vietnam are similarly gearing up.

Unfortunately, in Pakistan, the confidence of the industry and investors has been shattered by the energy Division’s proceed to impose additional costs or surcharges over above the all-inclusive 7.5 cents per unit approved by the ECC and cabinet vide SRO 12 of January 1, 2019.

Further clarification that the 7.5 cents per unit was all inclusive was presented with on February 8, 2019 and March 29, 2019. APTMA in its communication to Abdul Razak Dawood said that the intent of regionally competitive energy tariff has been nullified by the Power Division’s letter dated February 10, 2020 which includes resulted in billing of the unjustified arrears from January 2019.

Pakistan’s textile sector happens to be operating at near full capacity and directly looking for fresh investments for modernisation, expansion and new projects so that you can meet export orders.

As a result of the short-sightedness of the energy Division, APTMA in the letter says, what things to talk about expansions or new projects, even the currently operating companies will probably walk out business leaving millions employees direct and indirect out of work. “This will certainly cause civil unrest dues to the sharp upsurge in unemployment.”

“If the Power Division’s ill-advised about turn on the problem of the all-inclusive 7.5 cents per unit electricity tariff for export sectors is not corrected, we can not only lose this once in a life time opportunity for boosting exports but also head towards pre-mature deindustrialisation, massive unemployment, a precipitate falls in exports,” says the letter.

In the interest of Pakistan, APTMA requested the adviser’s assistance in correcting the grave error being enacted. Shahid Sattar in the letter hoped that the adviser will also raise voice with textile industry to improve the injustice being meted out to exporters. Shahid Sattar reiterated that the industry is focused on rapidly increase exports and capacity to meet up the enhance export orders and capture as a lot of the opportunity aswell provided the regional competitive tariff of 7.5 cents earlier approved by PM, ECC, cabinet and notified too is fully implemented.
Source: https://www.thenews.com.pk

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