Heavy Duties on Raw Materials Impact Textile Exports in Pakistan

Nearly 80% custom duties and protective duties on locally produced raw material used in exportable textiles and denial of duty drawback on filament yarn are negatively impacting the textile exports, said Pakistan Textile Exporters Association Chairman Rana Arif Tauseef.

Speaking to the media late on Nov. 28, 2011 evening, Tauseef said that a level playing field was not being provided to Pakistani textile exporters as raw material and inputs used in manufacturing were comparatively costlier than regional countries, making the products uncompetitive in the international market.

Rival exporters in India, Sri Lanka and China are getting raw material at cheaper rates and they are able to sell their textiles at lower rates to international buyers, he elaborated. In this age of competition, the exporters have to cut their manufacturing cost to remain afloat, he said.

The national governments in exporting countries facilitate their exporters by providing relief from taxes, duties and levies and zero rating the manufacturing cost, he stated.

On the contrary, the Pakistani exporters are heavily burdened with protective duties and levies which favour the raw material importers and local manufacturers of inputs like filament yarn and chemical manufacturers.

Furthermore, almost 120 days this year was lost to power outages, cutting the production output by one-third, besides delaying the consignments and failure of meeting export schedules and commitments with foreign buyers, he lamented.

Tauseef demanded the removal of protective and custom duties on raw materials, chemical and dyes and the allowing of custom rebate and drawback of local taxes on inputs, enabling the manufacturers to reduce their cost of production and compete effectively in international markets.