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Pakistan’s hosiery industry wants zero rate regime

Pakistan’s hosiery manufacturers and exporters say the delay in restoring zero rate regime is holding back textile makers from modernizing their industrial units. They want the zero rate regime for five export sectors. Industrial units face high power, gas and water rates.

A reduction in inputs costs is a long running demand of the country’s value-added textile exporters. They say this will help make Pakistan's exports competitive on world markets. Instead the soaring cost of inputs is hindering the country’s apparel textile growth. One point exporters make is the minimum wage in Pakistan is 111 per cent higher than in Bangladesh. A 20 per cent reduction would enable Pakistani exporters to compete with regional competitors. Similarly gas rates for the textile sector should also be reduced by 20 per cent.

A 0.25 per cent Export Development Surcharge is imposed on export proceeds. Exporters say the EDF should be placed on luxury imported goods like cars, soaps, shampoos, cosmetics and finished items and should be abolished from exports. Apparel textile makers want freedom to import yarn, fabric and other key raw materials. They say a four per cent incentive should be given on indirect exports of yarn/local sale on domestic markets.