Textile Ministry’s Presentation To Finance Reveals Country’s Spinning Mills Blighted By Impaired Capacity
Around 30 percent production capacity of spinning mills is stated to be impaired and the potential idle capacity of textile value chain is mainly in Punjab, which may be hurting the country’s exports. Sources said that as per textile industry’s presentation to the Finance Ministry, 30 percent production of spinning mills is impaired and potential idle capacity of textile value chain is mainly in Punjab. An official said that industry argued that it could not compete with other regional players in the international market due to high cost of doing business in the country.
They cited multiple local, provincial and federal taxes on the exporters and stated that these are ranging from turnover tax of 1 percent of sale, transportation cost of material and end products to exporters on account of higher tax on diesel, Rs 50 per bale cotton cess, stamp duty at the rate of 0.2 percent of export documents, textile Cess at the rate of one percent as well as withholding tax on imported cotton. Additionally, there are surcharges and levies on the energy, which are, as per the presentation, making the country’s export uncompetitive in the international market.
Sources added that a regional comparison reveals that Pakistan was worst in terms of enabling growth environment and there was no annual growth of textile and clothing. A comparison of country’s share in the world textile and clothing export market to that of regional competitors such as Bangladesh, China and India was given.
They added that as of 2015, only 25 percent weaving machine were less than 10 years old in the country, whereas 100 percent waving machines in India and Bangladesh were less than 10 years of age. Moreover, they said that according to textile industry, installed capacity utilisation of textile sector was 70 percent as compared to 90 percent each in India Bangladesh and China.

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