Textile Exporters in Pakistan Are Experiencing Severe Financial Crisis

Textile exporters in Pakistan are experiencing severe financial crisis as much of their money is blocked with different Government departments, which are delaying refunds for sales tax, customs, local taxes and federal excise duty, Asghar Ali, chairman and Muhammad Asif, vice chairman of Pakistan Textile Exporters Association (PTEA), has said.
 
The blockage of funds is badly hitting the Pakistani textile industry, particularly at a time when many key industry players have invested large sums for infrastructure upgradation and capacity expansion, to cater to rising export demand, the duo told reporters.
 
The textile export sector, contributing over US$ 13 billion to the country’s economy each year, is in despair, as textile exports are waning and the industry is crumbling, due to lack of funds, the PTEA officials said.
 
The blocked amount would otherwise have been used by the exporters for business expansion, which in turn would have boosted the country’s export earnings, they added.
 
In addition, severe energy crisis is continuing to affect the operations of textile export units, ultimately resulting in a production loss.
 
Meanwhile, Mr. Asif said continuously rising cost of inputs is also troubling the exporters, rendering them uncompetitive in global market.
 
Mr. Ali said as textile exports are waning, it is causing several small units to shut shops rendering several workers jobless.
 
Pakistan’s textile sector exports, which stood at US$ 12.3 billion during last fiscal, were expected to rise to US$ 15 billion this fiscal, however, now it seems difficult to achieve this target in view of lack of funds, he added.
 
The duo urged the Government to come forward and help the textile sector exports to rise above the crisis, by removing hurdles and initiating steps to boost exports.
 
They also called for speedy release of the sums blocked under customs rebate, SED refund, DLTL and sales tax refunds, so as to enable textile exporters to sustain their presence in global markets, in these times of tough competition.