During October 2019 Pakistan’s textile exports grew by 7.4 per cent compared to the same month last year. Textile exports during the four months of the current fiscal year grew by four per cent compared to the same period last year.
But the industry is struggling with high costs of doing business, a severe liquidity crunch, delayed refunds, and high interest rates. The zero-rated facility for five export-oriented sectors was withdrawn and a 17 per cent sales tax on raw materials import was restored. Exporters were promised sales tax refunds within 72 hours. However this didn’t happen, and sales tax refunds piled up and as many as 40 units closed operations. So millers are eager to have the zero-rated tax facility on the textile sector brought back. Many export-oriented industrial units are on the verge of closure. A number of textile manufacturers are moving their operations abroad or at least considering overseas expansion. Some, like Reshma Tex, a leading textile firm, are thinking of setting up a textile factory in Vietnam.
Pakistan’s textile industry has become viable after a gap of ten years, especially through the provision of regionally competitive energy tariffs. The industry witnessed a record 26 per cent growth in quantitative terms.