Monday June 17, 2024

TDAP stresses diversification of export basket

By Our Correspondent
April 13, 2019

KARACHI: The Trade Development Authority of Pakistan (TDAP) has stressed for diversification of the country’s export basket by including more value-added products from minerals, leather, surgical instruments, pharmaceuticals, and footwear categories to tap the European market, a report issued by the authority said.

“The current export basket is predominantly reliant on textile products. Pakistan can exploit the GSP Plus Scheme by diversifying its export basket,” it added.

India has graduated from standard GSP Scheme for categories, including textiles and leather. Thus, there is an opportunity for Pakistan to capture the market share, it said.

Moreover, the ceiling for import share under GSP Plus has been increased from 2 percent to 6.5 percent, and Pakistan can exploit this opportunity to increase its exports.

According to Pakistan Business Council (PBC), trade with the European Union plays a significant role in Pakistan’s trade; Pakistan had a trade surplus of $2.14 billion in 2016. It reported $6.92 billion worth of exports to the EU, making the EU Pakistan’s largest export partner.

Under the GSP+, the EU’s imports from Pakistan have risen from $6.90 billion in 2013 to $8.08 billion in 2016. However, this increase in the EU imports from Pakistan has been concentrated on textiles, which made up nearly 86 percent of the EU imports from Pakistan.

TDAP suggests prioritising trade promotion activities for instruments and appliances used in medical, surgical or veterinary sciences. Further, there is a dire need to develop brand names in this product to capture more market share in the developed countries, the report said.

Customs duty on raw materials for leather products and surgical instruments need to be rationalised. “The current Customs duty on raw materials for leather products ranges from 16 percent to 20 percent, while that on raw materials for surgical instrument it ranges in between 11 percent to 16 percent.

An integrated mechanism is needed in the leather sector to procure raw materials. Further, the forward and backward linkages in the surgical instruments and leather industries need special attention.

Moreover, production machinery and process for both surgical and leather products need upgradation on modern lines, the report suggested.