Latest news with #GSP+
Business Recorder
2 days ago
- Business
- Business Recorder
PRGMEA seeks targeted policy support in budget
KARACHI: In an urgent appeal to the government, the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has called for targeted policy support in the upcoming budget to address pressing challenges facing the country's value-added textile export sector. The association also urged the full and proper restoration of the Export Facilitation Scheme (EFS) and the Final Tax Regime (FTR). Representing a $4.9 billion export segment, the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has submitted a detailed communication to Prime Minister Shehbaz Sharif and Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production. In the letter, on behalf of PRGMEA, former Chairman Ijaz A Khokhar has highlighted six critical areas requiring urgent intervention: reinstatement of the EFS, restoration of the FTR, engagement on high US tariffs, clearance of refund backlogs, preparedness for the GSP+ review, and the launch of a national branding campaign to promote 'Made in Pakistan' garments. $60bn exports by 2029 target unachievable: MoC Khokhar also outlined a set of strategic policy recommendations aimed at restoring the sector's competitiveness, streamlining tax and refund mechanisms, and positioning Pakistan to benefit from evolving global trade trends He warned that without timely and targeted reforms, Pakistan risks losing its competitive edge at a time when global apparel buyers are diversifying away from traditional sourcing hubs, presenting a rare opportunity for local exporters. He has emphasized that continuity in policy, lower costs of doing business, and SME-focused facilitation is essential to unlocking the sector's true potential and advancing the Prime Minister's vision of achieving $100 billion in exports. PRGMEA urged the government to fully restore the original EFS framework, ensuring it remains a practical and enabling tool for the exporters. The recent changes in this scheme are highly restrictive and counterproductive, particularly for SMEs operating under Just-in-Time (JIT) and Never Out of Stock (NOS) export business models that require longer lead times and flexible inventory management, he added. Moreover, he suggested that any addition of sales tax within the EFS framework must be avoided, as it risks double taxation and imposes unnecessary financial and administrative burdens on exporters. Khokhar said that the demand by a sub-sector to exclude fabric and yarn from the EFS is not justified, particularly when it comes to technical and functional materials that are not produced locally as per international standards. In many cases, exporters are obligated to source specific fabrics or yarns from buyer-nominated suppliers to meet international quality and compliance standards, he mentioned. Restricting such imports under EFS would severely impact the competitiveness and operational viability of Pakistan's value-added apparel exporters. PRGMEA recommends that the EFS be reinstated in its original true letter and spirit, so that Pakistan's value-added textile industry can operate competitively, reliably, and sustainably in the global market. PRGMEA has urged the government to restore the FTR to simplify tax compliance, eliminate redundant audits, and improve the overall ease of doing business particularly for SMEs. PRGMEA recommends that the government, immediately engage US trade authorities to review the reciprocal tariff and advocate for GSP-like tariff relief or ESG-linked concessions for sustainably produced garments. Khokhar has strongly urged the government to implement a fully automated, time-bound refund mechanism to ensure uninterrupted cash flow for exporters as delays in the disbursement of sales tax refunds and customs rebates continue to create severe liquidity constraints, particularly for SMEs operating on tight margins. To expand Pakistan's global footprint, Khokhar has urged the Ministry of Commerce to launch a robust marketing and branding campaign for 'Made in Pakistan' garments. Trade fairs, B2B matchmaking, and digital outreach through embassies should be part of this drive, he added. Without concrete reforms, policy continuity, and timely facilitation, the true potential of this sector and its contribution toward national export targets will remain unrealized, he concluded. Copyright Business Recorder, 2025
IOL News
30-05-2025
- Business
- IOL News
Pakistan's forgotten workforce: A global supply chain built on exploitation
From textile mills in Faisalabad to construction sites in Karachi, millions of Pakistanis are trapped in a cycle of low wages, unsafe working conditions, and systemic neglect, fuelling global supply chains while earning little more than a survival. While India positions itself as a digital powerhouse and South Africa strengthens its manufacturing sector through progressive labour reforms, Pakistan remains tethered to a system that relies on the chronic exploitation of its workers. From textile mills in Faisalabad to construction sites in Karachi, millions of Pakistanis are trapped in a cycle of low wages, unsafe working conditions, and systemic neglect, fuelling global supply chains while earning little more than a survival. This labour exploitation is not a domestic issue alone; it has far-reaching implications for global labour markets. Many of the goods manufactured in Pakistan — from garments and leather products to surgical instruments — end up in Western retail stores. But the workers behind these products are often paid less than the legal minimum wage, without contracts, benefits, or basic safety equipment. Pakistan's economy relies heavily on its export sector, particularly textiles, which account for over 60% of total exports. Behind these figures lies a workforce often earning as little as $72 a month, far below the recommended living wage. Many are employed informally, with no legal recourse if injured, fired, or harassed. Factories subcontract their work to smaller units to bypass labour regulations, creating a shadow economy where labour laws simply don't apply."Multinational brands continue to source from Pakistan not because it is efficient, but because it is cheap," says Amina Shah, a Lahore-based labour rights advocate. "They benefit from a system where accountability is diluted and inspection regimes are weak."Pakistan's inability or unwillingness to enforce labour protections starkly contrasts with recent reforms in other Global South economies. In India, for instance, the digitisation of labour contracts and increased scrutiny of employers has begun to curb exploitative practices, while South Africa's implementation of a national minimum wage and improved union protections has strengthened worker rights. The gap is growing — and with it, Pakistan's vulnerability. Not only are workers suffering, but the country is losing out on international contracts that increasingly require compliance with ethical sourcing standards. Pakistan's continued listing on the European Union's GSP+ trade scheme, which grants tariff-free access in exchange for human rights and labour compliance, is under scrutiny. A future suspension could devastate exports."We're not just talking about poor working conditions — we're talking about modern slavery," said an EU trade observer who requested anonymity. "The world is watching." Meanwhile, Pakistan's labour force remains voiceless. Unionisation is discouraged or outright banned in many industrial zones. The ''contract system" — where workers are hired through middlemen — absolves companies of responsibility, leaving workers unprotected and easily disposable. As Pakistan navigates an uncertain economic future, it faces a stark choice: either reform and protect its labour force, or remain a source of cheap but ethically tainted goods in a world growing increasingly intolerant of exploitation. For the millions of workers on the margins, reform is not just a policy matter — it's a question of survival.
Business Recorder
13-05-2025
- Business
- Business Recorder
Pakistan's $60bn export target: Ministers told to craft business plans
ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal directed the concerned ministers to prepare business plans to achieve $60 billion export target during the next five years. The minister Monday chaired a high-level meeting to review Pakistan's export-led growth strategy under the 'Uraan Pakistan' programme. This session was the first bimonthly meeting of the first 'E'—Exports—from the five Es framework that defines the government's roadmap to transform Pakistan into a $1 trillion economy by 2035. During the meeting, directed all relevant ministries to form dedicated working groups, develop cluster-wise business plans, define measurable export targets, and submit comprehensive execution frameworks ahead of the next review meeting scheduled in two weeks. He emphasised a national target of $60 billion in export growth over the next five years, instructing that this must be treated as a mission-critical national priority. Jul-Apr exports up 6.25pc to $26.859bn YoY 'This is not business as usual. We need to adopt a radically different approach—a breakaway from the past. This is a 100-metre sprint. We must run faster than our competitors to capture global markets,' said the minister. He stressed the importance of data-driven planning and value chain development, instructing the senior officials of Planning Ministry to immediately undertake a comprehensive data analytics exercise to evaluate domestic strengths and map global market trends. 'Unless we have exact, precise data, our resources will be wasted. We must sit at the drawing board and align our capacities with global demand,' he said. The minister emphasised that export development is not merely about opening LCs and shipping containers—it requires building a complete ecosystem including regulatory compliance, certification, branding, and integration with global supply chains. He stated, 'Made in Pakistan' must become synonymous with quality, productivity, and sustainability. To this end, the Planning Ministry is facilitating the development of eight strategic clusters identified as anchors of Pakistan's future export growth: (1) Agriculture and Agro-based Exports; (2) Industry and Manufacturing (including textiles, engineering, pharmaceuticals); (3) Services (excluding IT, including financial services, medical tourism, consultancy); (4)Information Technology and Digital Services; (5) Mining and Minerals; (6) Manpower Exports and Overseas Employment; (7) Blue Economy (Maritime Sectors) and (8) Creative Industries (media, arts, and culture). Each cluster has been assigned to a respective ministry with convening responsibilities to prepare detailed, inter-ministerial business plans for each product and sub-sector within their domains. In his remarks, Prof Iqbal emphasised the need for compliance with international environmental and quality standards, including certifications required for preferential trade regimes such as GSP+. Calling the challenge an economic emergency, he urged the Ministry of Commerce to disaggregate the $60 billion target across the eight sectors, propose practical policy measures, and coordinate closely with provincial and private stakeholders. 'This requires a national effort. Just as our Air Forces have made us proud with hard work, our economic institutions must now step up to make the nation proud,' he said. The minister concluded by stressing the 80/20 principle—focusing efforts on projects with maximum potential impact — and reiterated that fortnightly reviews will be held for each 'E' under the Uraan Pakistan framework to ensure strict implementation and accountability. Copyright Business Recorder, 2025
Business Recorder
13-05-2025
- Business
- Business Recorder
$60bn export target: Ministers told to craft business plans
ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal directed the concerned ministers to prepare business plans to achieve $60 billion export target during the next five years. The minister Monday chaired a high-level meeting to review Pakistan's export-led growth strategy under the 'Uraan Pakistan' programme. This session was the first bimonthly meeting of the first 'E'—Exports—from the five Es framework that defines the government's roadmap to transform Pakistan into a $1 trillion economy by 2035. During the meeting, directed all relevant ministries to form dedicated working groups, develop cluster-wise business plans, define measurable export targets, and submit comprehensive execution frameworks ahead of the next review meeting scheduled in two weeks. He emphasised a national target of $60 billion in export growth over the next five years, instructing that this must be treated as a mission-critical national priority. Jul-Apr exports up 6.25pc to $26.859bn YoY 'This is not business as usual. We need to adopt a radically different approach—a breakaway from the past. This is a 100-metre sprint. We must run faster than our competitors to capture global markets,' said the minister. He stressed the importance of data-driven planning and value chain development, instructing the senior officials of Planning Ministry to immediately undertake a comprehensive data analytics exercise to evaluate domestic strengths and map global market trends. 'Unless we have exact, precise data, our resources will be wasted. We must sit at the drawing board and align our capacities with global demand,' he said. The minister emphasised that export development is not merely about opening LCs and shipping containers—it requires building a complete ecosystem including regulatory compliance, certification, branding, and integration with global supply chains. He stated, 'Made in Pakistan' must become synonymous with quality, productivity, and sustainability. To this end, the Planning Ministry is facilitating the development of eight strategic clusters identified as anchors of Pakistan's future export growth: (1) Agriculture and Agro-based Exports; (2) Industry and Manufacturing (including textiles, engineering, pharmaceuticals); (3) Services (excluding IT, including financial services, medical tourism, consultancy); (4)Information Technology and Digital Services; (5) Mining and Minerals; (6) Manpower Exports and Overseas Employment; (7) Blue Economy (Maritime Sectors) and (8) Creative Industries (media, arts, and culture). Each cluster has been assigned to a respective ministry with convening responsibilities to prepare detailed, inter-ministerial business plans for each product and sub-sector within their domains. In his remarks, Prof Iqbal emphasised the need for compliance with international environmental and quality standards, including certifications required for preferential trade regimes such as GSP+. Calling the challenge an economic emergency, he urged the Ministry of Commerce to disaggregate the $60 billion target across the eight sectors, propose practical policy measures, and coordinate closely with provincial and private stakeholders. 'This requires a national effort. Just as our Air Forces have made us proud with hard work, our economic institutions must now step up to make the nation proud,' he said. The minister concluded by stressing the 80/20 principle—focusing efforts on projects with maximum potential impact — and reiterated that fortnightly reviews will be held for each 'E' under the Uraan Pakistan framework to ensure strict implementation and accountability. Copyright Business Recorder, 2025
Business Recorder
12-05-2025
- Business
- Business Recorder
GSP plus status: EU review puts Pakistan's duty-free export to the test amid reforms push
Pakistan's crucial trade advantage under the European Union's (EU) GSP plus (+) scheme remains under review, as the European Commission evaluates the country's compliance with international human rights and governance standards. Dr Martin Henkelmann, CEO at German Emirati Joint Council for Industry and Commerce (AHK UAE) and Florian Walther, Pakistan Representative at German Emirati Joint Council for Industry and Commerce (AHK UAE) said this in response to questions by Business Recorder. The GSP+ (Generalised Scheme of Preferences Plus) has played a pivotal role in Pakistan's export-driven economy, allowing over 76% of its exports to the EU — primarily textiles and garments — to enter duty-free. Since Pakistan joined the scheme in 2014, exports to the EU have more than doubled, reaching €8 billion in 2023, including €2.4 billion to Germany. The development has made EU the single largest export destination for Pakistan. The ongoing review began in June 2022, resulting into extending GSP+ trade incentives to Pakistan till 2027. The upcoming announcement of the outcome from the ongoing assessment on the 27 conventions would guide the EU to further extend the GSP+ status for Pakistan beyond 2027, it was learned. 'Pakistan's GSP+ status remains under systematic review by the European Commission as part of the ongoing monitoring cycle. While the Commission has not yet issued a formal conclusion, recent developments—including the visit of EU Special Representative for Human Rights Ambassador Olof Skoog in late January 2025—highlight the significance of this process,' Henkelmann and Walther informed. GSP+ monitoring mission is scheduled for June 2025, it was learnt. The two German officials said there was an ongoing and open dialogue between the EU and Pakistan on improving compliance with the 27 core international conventions related to human rights, labour rights, environmental protection, and good governance. 'In our own engagements with stakeholders across Pakistan—including chambers of commerce, export associations, and the business community itself—it is consistently highlighted that GSP+ is not just a trade preference but a vital enabler of employment, growth, and economic diversification. There is widespread awareness that continued progress regarding the GSP+ requirements is necessary and in the country's long-term interest,' they added. In response to evolving global priorities, the EU has revised the GSP+ framework. The updated scheme includes additional conventions, stricter procedural obligations, and now requires beneficiary countries to submit detailed action plans. 'Pakistan has been given a two-year transition period to meet the new standards.' The extension of the monitoring cycle from two to three years allows for more comprehensive evaluations and aligns the process with international mechanisms. Pakistan must now demonstrate measurable reforms, they said. With exports under pressure and jobs linked to the EU market access, Pakistan's path forward in retaining GSP+ will depend on its ability to adapt to the tighter framework—and reassure partners like Germany of its commitment to reforms. The EU has already updated the GSP+ framework to better reflect evolving global challenges and policy priorities. The revised scheme introduces additional international conventions and sets out stricter procedural requirements, including the obligation for candidate countries to submit a detailed action plan demonstrating how they will implement these conventions. 'For existing beneficiaries like Pakistan, a transitional period of two years has been granted to ensure compliance with the enhanced obligations. The extension of the monitoring cycle from two to three years also aligns the process more closely with international treaty mechanisms, allowing for deeper, more structured evaluations. These updates aim to preserve the integrity and effectiveness of GSP+.' For Pakistan, this means that continued access to the scheme now depends even more clearly on measurable reforms. The GSP+ status has enabled robust export growth—especially in the textile sector—and serves as a cornerstone of EU-Pakistan economic relations. The continuation of GSP+ is not only a trade priority, it is crucial for maintaining export competitiveness, creating jobs, and sustaining bilateral trade momentum.
