After registering a positive growth of 2.75 per cent in fiscal year 2014, Pakistan’s textile and garment exports registered a negative growth of 4.88 per cent in 2015 and 12.11 per cent in 2016. The major reasons for the decline were low commodity prices, slowdown of the Chinese economy and the euro zone debt crisis.
In order to restore competitiveness and boost exports of the country, a package has been prepared. Salient features of the package are zero rating of machinery imports, withdrawal of duty and sales tax on cotton imports, withdrawal of duty on imports of manmade fibers, release of pending liabilities of textile policies, release of pending sales tax refunds, drawback of taxes.
Projects like technology upgradation, product development, branding and certification have been taken up. The sales tax zero-rating regime for five export oriented sectors covers textiles, leather, carpets, surgical and sports goods.
To reduce the cost of doing business, the electricity tariff has been cut by Rs 3 for industrial units. Fuel adjustment has been passed on to the consumer to further reduce the cost of production. Pakistan will conclude bilateral agreements with major players in Asean and will then engage with Myanmar. FTA negotiations with Turkey and Thailand are at an advanced stage.