Pakistan’s textile sector has been hit by a liquidity crisis. Refunds have been delayed. The zero-rated status to the export industry has been withdrawn and replaced by a 17 per cent sales tax on the textile sector. Exporters were promised refunds within 72 hours. But refund applications of exporters are still in process and meanwhile the liquidity crisis has got worse. The energy package is yet to be implemented.
Pakistan’s textile exports increased by 26 per cent in the last fiscal year and last month exports increased by eight per cent in quantitative terms and by 4.10 per cent in value terms. Pakistan’s textile exports during the first four months of the current financial year increased by 4.10 per cent. Knitwear exports were up 9.49 per cent. Bed wear exports were up 5.72 per cent. However, exports of raw cotton from the country came down. The country’s merchandise trade deficit plunged by 33.52 per cent. Exports during the period increased 3.81 per cent. Imports into the country declined 19.21 per cent. However, in the last four months of the current financial year, cotton yarn exports decreased by 2.14 per cent, cotton cloth exports by 4.83 per cent, and exports of tents, canvas and tarpaulin by 1.58 per cent.