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February 22, 2020

Textile industry cautions govt against losing ‘golden opportunity’

Top Story

February 22, 2020

ISLAMABAD: While India’s textile industry is all set to capture $20 billion (Rs3,086 billion) market opportunity created by shutdown in China in the wake of coronavirus outbreak and Bangladesh and Vietnam are also gearing up to ensure their share, but Pakistan’s textile industry is struggling for the implementation of all inclusive electricity tariff of 7.5 cents per unit as the Power Division has included more surcharges in the bills owing to which power tariff for export industry has gone to 13 cents per unit.

This situation will not only make Pakistan’s textile products in international market non-competitive, but also make industry vulnerable enough not to grab the opportunity created in world market because of China shutdown and if the tariff of 13 cents per unit continues to appear in bills then there is fear that process of deindustrialisation may start, triggering massive unemployment and unrest in the country. This is the essence of the letter written by Executive Director All Pakistan Textile Mills Association (APTMA) Shahid Sattar to Abdul Razak Dawood, Adviser to Prime Minister on Commerce, Textile, Industries and Production and Investment written on Friday.

According to a copy of the letter with subject ‘Golden opportunity to increased export market share being squandered’ APTMA mentioned that Indian Textile Secretary Ravi Capoor has called for the textile industry of India to rally and grab the opportunity created by the shutdown in China. In this connection, the government of India is extending all possible support to the industry to capture as much of the estimated $20 billion market opened up. Bangladesh and Vietnam are similarly gearing up.

Unfortunately, in Pakistan, the confidence of the industry and investors has been shattered by the Power Division’s move to impose additional costs or surcharges over above the all-inclusive 7.5 cents per unit approved by the ECC and cabinet vide SRO 12 of January 1, 2019.

Further clarification that the 7.5 cents per unit was all inclusive was given on February 8, 2019 and March 29, 2019. APTMA in its communication to Abdul Razak Dawood said that the intent of regionally competitive energy tariff is being nullified by the Power Division’s letter dated February 10, 2020 which has resulted in billing of these unjustified arrears from January 2019.

Pakistan’s textile sector is currently operating at near full capacity and directly in need of fresh investments for modernisation, expansion and new projects in order to meet export orders.

As a result of the short-sightedness of the Power Division, APTMA in the letter says, what to speak of expansions or new projects, even the currently operating companies are likely to go out of business leaving millions workers direct and indirect out of work. “This will surely cause civil unrest dues to the sharp increase in unemployment.”

“If the Power Division’s ill-advised about turn on the matter of the all-inclusive 7.5 cents per unit electricity tariff for export sectors is not corrected, we will not only lose this once in a life time opportunity for enhancing exports but also head towards pre-mature deindustrialisation, massive unemployment, a precipitate falls in exports,” says the letter.

In the interest of Pakistan, APTMA requested the adviser’s assistance in correcting the grave error being enacted. Shahid Sattar in the letter hoped that the adviser will also raise voice with textile industry to correct the injustice being meted out to exporters. Shahid Sattar reiterated that the industry is committed to rapidly increase exports and capacity to meet the enhance export orders and capture as much of the opportunity as well provided the regional competitive tariff of 7.5 cents earlier approved by PM, ECC, cabinet and then notified too is fully implemented.