Compared to China, India and Bangladesh, Pakistan is earning less foreign currency by exporting textiles to USA and Europe. According to the report published in fibre2fashion, a UNDP report titled “Asia-Pacific Development Report 2006” says that Pakistan is getting $5.38 per kilogram and China, Bangladesh and India are getting $9.85, $8.60, and $8.67 per kilogram of textile products. Pakistan could not take the advantage of quota free regime. Last year, Pakistan earned $5.39 billion by exporting 1 billion kilogram textile products and Bangladesh exported 805 million kilograms and earned $6.99 billion.
Cotton is known as the major cash crop of Pakistan and textile accounts for the lion’s share of the country’s foreign currency earning. In 2006, 62% of Pakistan’s foreign currency earning came from the export of textiles and around six billion dollars is invested in this sector in the last seven years. According to a report published in Bharattextile.com, the production of textile has become costlier in Pakistan due to high input cost. Where Bangladesh is giving tax holidays and other incentives to make their textile industries more competitive, Pakistani government is not allowing any tax or cash incentives to its textile industry. A special committee set up by the Textile Ministry of Pakistan, has submitted a report to the government recommending a Rs. 50 billion cash incentive but the government has rejected it.
Textile is one of the major export items of Pakistan. There are many textile factories around the country. Many people earn their livelihood by working in these factories. Any kind of economic loss could destroy their lives. So I think Pakistan government should not take any risk. It should try its best to keep the textile industry competitive and profitable and if it requires giving the textile producers any incentives then it is worthed.
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Posted by: antonysalomi | October 24, 2006 5:58 AM | Permalink to Comment