Leather industry demands fair treatment

KARACHI: Leather industry on Monday urged the government to treat it on par with textile and other export-oriented sectors in order to help the exporters reverse the exports’ decline.

Fawad Ijaz Khan, patron-in-chief of Pakistan Leather Garments Manufacturers and Exporters Association said the federal government has planned multibillion rupees incentive package for the textile sector. 

Khan, in a statement, urged the government to include the leather industry into the proposed package.

He said exports of leather garments fell 12.35 percent to $320 million during the last fiscal year of 2015/16.

“This downward trend is also continuing during the current financial year as exports were down 8.5 percent during July-August 2016/17 as compared to July-August 2015/16,” he added. 

The industry leader said the main reason of exports decline is the high cost of production in Pakistan and overvaluation of rupee against foreign currencies. 

“The exports are badly hit especially in the UK where the value of pound fell around 25 percent during the last few months,” he added.

He said the Prime Minister Nawaz Sharif, during a meeting last month, assured the exporters of incentive package within a week, “but still there is no announcement.”

He said the Prime Minister was told about the declining exports of leather industry during the meeting. 

Khan said four percent incremental rebate on leather goods exports, announced in the trade policy (2016/18), is of no use as, “presently exports are down for most of the exporters and this incentive is only payable if exports cross 10 percent over the previous year.”

He said the proposed eight percent rebate to be announced for the textile garments’ exporters should also be given on exports of leather garments and goods. Likewise, the proposed reduction of four percent in customs/regulatory duty to zero on cotton import should also be available on imports of all types of leathers. 

“Exports of leather garments and goods are heavily dependent on the import of raw, split and wet blue leathers from New Zealand, Iran, Saudi Arabia, UK etc.,” he added.

Khan said no one from the ministry of commerce and the Trade Development Authority of Pakistan (TDAP) is involved in the formulation of this proposed incentive package.  “The minister of commerce and CEO TDAP should be consulted before the finalisation of Incentive package,” he added.