Textile sector will improve Pakistan’s overall exports by $27 billion in the next fiscal year
Considering the current fiscal year, the textile sector's export earnings will increase by $3 billion this year, as indicated in the letter.
The new coronavirus SOPs brought some ease to the country’s economic situation, as businesses were authorized to reopen. As soon as the businesses got back up on their feet, manufacturing companies in Pakistan, mainly the textile sector, came bearing good news.
The textile sector of Pakistan broke new grounds, as it received orders from various exporting countries. These orders will help the textile manufacturers utilize 80-90% of their production capacity by the next quarter. This realization is terrific news for Pakistan’s economy, as these export orders can account for total export of $17.5 billion in the financial year 2020-21.
Regarding the export matter, the All Pakistan Textile Mills Association (APTMA) sent a letter to the Prime Minister (PM) Imran Khan. The letter stated that if the demand of the international market continues to rise at this rate, the export orders will not only increase the exports of the textile sector by $17.5 billion but enhance the country’s overall exports by $27 billion in the next financial year.
Considering the current fiscal year, the textile sector’s export earnings will increase by $3 billion this year, as indicated in the letter.
The letter continued to enlighten PM Imran Khan with good news by stating that the textile sector’s export earnings would be able to support the dwindling foreign exchange earnings of the country, in case the inflow of remittances is low.
The projected 20% decline in remittances will be offset, and the trade and current account deficit of the country will be contained by the country’s export receipts in the next financial year.
The textile sector will enhance the situation of unemployment in the country by generating employment opportunities for thousands of workers. With investments from foreign and local investors, the textile industry will also support local industries.
However, the letter mentioned a significant concern of the APTMA regarding the achievement of these benchmarks. According to the textile exporters, the milestones can only be achieved if the government revisits the financial bill and introduces incentives for the sector.
APTMA asked the government to reduce the sales tax rate and reduce the turnaround tax (from 1.5% to 0.5%) to ensure quick issuance of refunds. Moreover, APTMA demanded competitive pricing of energy, including electricity and gas, for the textile exporters and manufacturers.
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