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Pakistan's textile exports drop despite GSP plus

Pakistan's textile exports dropped by 2.37 per cent in July 2014 despite the GSP Plus benefit.  A severe energy shortage was the prime reason behind the drop. Almost 50 per cent of the production capacity of the textile industry is unused  due to the short supply of electricity and gas. This means the industry has been unable to produce an export surplus.

Pakistan’s textile exporters have urged the government to take stock of the situation and step up to save the largest export earning industry of the country by restoring the viability of textile industry through provision of uninterrupted energy supply at competitive rates and immediate release of unsettled sales tax refunds. Pakistan is riled by the fact that with GSP Plus, its exports are lower than India’s, though India doesn’t have GSP Plus benefits.

The GSP Plus benefit was extended to Pakistan by the European Union in the first quarter  of this year. Even in the first three months, the overall textile growth in exports to EU remained nominal against the estimated growth of 15 per cent because of non-availability of gas, electricity and the devaluation of the dollar.