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Business Recorder
7 hours ago
- Business
- Business Recorder
Trade barriers and cooling supply chains: Apparel sector warns of setbacks
LAHORE: Seeking an urgent meeting with Prime Minister Shehbaz Sharif ahead of the federal budget, Pakistan's apparel sector; a vital contributor of over $9 billion in export revenue has warned that the country's value-added textile industry faces serious setbacks due to continued tariff barriers and restrictive policies that are choking supply chains. In a joint statement issued by the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) and the Pakistan Hosiery Manufacturers & Exporters Association (PHMA), apparel exporters stressed that global buyers now demand certified, high-performance materials that are simply not available in Pakistan. Yet, import of such essential raw materials remains hindered by duties and outdated regulations. PRGMEA Regional Chairman Dr. Ayyazuddin and PHMA Zonal Chairman Abdul Hameed jointly demanded a direct and an immediate meeting with the prime minister ahead of the budget, warning that without urgent intervention, Pakistan could lose out on the global shift in sourcing patterns that has opened fresh opportunities for new exporters. Dr. Ayyazuddin emphasized that Pakistan still relies heavily on cotton-based exports — primarily denim and fleece — while nearly 80% of global apparel trade has moved toward synthetic and functional textiles. 'We cannot expand or diversify if we don't have access to the right raw materials,' the statement said. 'We are being penalized for importing items that aren't even produced locally.' Abdul Hameed pointed out that man-made fibers, technical yarns, performance fabrics, and critical trims — many categorized under HS Chapters 54, 55, and 96 — are subject to duties despite not being manufactured in the country. 'Keeping tariffs on non-available raw materials is equivalent to taxing exports before they even happen,' he said. Former PRGMEA chairmen Ijaz Khokhar and Sajid Saleem Minhas backing the joint demand highlighted that SMEs are particularly vulnerable due to rigid policies and lack of flexibility in global compliance. 'We've sent a detailed letter to the Prime Minister Shehbaz Sharif and commerce ministry outlining how certain recent policy changes, like the shortening of the Export Facilitation Scheme (EFS) input period from 60 to just 9 months, are unrealistic for the apparel sector,' he said. PRGMEA ex-chairmen Ijaz Khokhar added that the letter, addressed to the PM as well as the Commerce Minister Jam Kamal, strongly criticizes the abrupt shift in EFS timelines. He argued that value-added exporters often operate under just-in-time and never-out-of-stock business models, requiring longer input cycles to fulfil diverse orders. He said that the current restrictions, it warns, will disrupt operations and increase compliance burdens for exporters. Sajid Saleem Minhas added that the local spinning industry has not evolved to meet the requirements of today's global fashion market. Since we don't produce the materials our buyers demand, we should at least allow their duty-free import. Otherwise, we are locking ourselves out of high-growth product categories, he said. The PRGMEA and PHMA members also called for restoration of the Final Tax Regime (FTR) for exporters, stating that the shift to the Normal Tax Regime has led to complex audits and disrupted business continuity. We need simplicity and certainty, not additional paperwork and scrutiny,' the statement noted. Ijaz Khokhar also raised another concern which is the lack of government push on trade diplomacy, particularly with the United States, where Pakistani textiles face an average import tariff of 29%, compared to lower rates for competitors like Bangladesh and Vietnam. The letter suggests Pakistan negotiate preferential terms or targeted tariff relief with the U.S., especially for eco-friendly and sustainable products that align with global ESG compliance. He said that refund delays were also highlighted as a chronic problem. Exporters are facing severe liquidity shortages due to delayed disbursement of DLTL, DDT, sales tax, and withholding tax refunds. The industry has requested an automated and time-bound mechanism for refund processing to ease working capital constraints. Additionally, both associations emphasized the need for a strong national marketing campaign for 'Made in Pakistan' garments. They urged the Ministry of Commerce to initiate global trade outreach through embassies, digital platforms, and targeted B2B events to increase visibility and improve brand image. He said that this sector has the potential to double its exports in five years and added that we need the government to first remove these structural roadblocks. Sajid Minhas said that the Pakistan's value-added textile sector is one of the largest employers and a key contributor to national exports. The country cannot afford to lose this opportunity. We request the prime minister to meet us urgently and help align policy with global market realities. Copyright Business Recorder, 2025
Business Recorder
4 days ago
- Business
- Business Recorder
PRGMEA opposes 18pc tax imposition under EFS
LAHORE: The Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) on Wednesday opposed any move to impose 18 percent sales tax on exporters under the Export Facilitation Scheme (EFS) and warned that such regressive measures will paralyze the garment export sector, stifle cash flow, and derail Pakistan's opportunity to capture a significant share of the global apparel market. Reacting to the proposals suggesting that the government is planning to slap a hefty tax burden on exporters, the PRGMEA voiced serious concern over what it described as a deliberate campaign by vested interests in the domestic textile sector to weaken the growth potential of the country's most dynamic and value-added industry — the ready-made garments (RMG) sector. The association called for the immediate withdrawal of any such proposal and demanded that the EFS remain untouched and fully functional to support exporters with timely and hassle-free access to tax-free inputs. Dr Ayyazuddin, PRGMEA Regional Chairman, stated that the EFS is not a luxury — it is a necessity for export-led growth. The garments industry is entirely export-oriented and sits at the end of the textile value chain, bearing the brunt of delayed refunds and multiple taxes. Exporters already pay sales tax upfront and wait for months to receive refunds, often facing a three-month delay, which severely hampers cash flow and operational capacity. Imposing additional taxes on top of this already burdensome system would be disastrous. Copyright Business Recorder, 2025
Express Tribune
4 days ago
- Business
- Express Tribune
Textile exporters sound alarm over tax, energy policies
Pakistan's leading garment and textile exporters have sounded alarm over the government's policies that they fear will cripple the vital export sectors, which will in turn lose a crucial opportunity to capture a larger pie of the global market. The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has vehemently opposed any move to impose 18% sales tax on exporters operating under the Export Facilitation Scheme (EFS). It warned that such a regressive tax measure would paralyse the garment export sector, stifle the essential cash flow and derail the chance for Pakistan to increase its presence in the global apparel market. The association expressed concern over what it described as a deliberate campaign by vested interests within the textile sector to weaken the country's most dynamic and value-added industry. PRGMEA Regional Chairman Dr Ayyazuddin stated that the EFS was not a luxury but a necessity for export-led growth, adding that the garment industry, being entirely export-oriented and positioned at the end of textile value chain, was already bearing the brunt of delayed refunds and multiple taxes. "Exporters pay sales tax upfront and wait for months to receive refunds; they often face a three-month delay, which severely hampers their cash flow and operational capacity," Ayyazuddin elaborated. He stressed that the imposition of additional taxes would prove disastrous as the garment industry was playing a critical role as Pakistan's biggest source of employment and foreign exchange, particularly at a time when global trade shifts were offering new opportunities. He warned that any restriction or levy on imported inputs, which are essential as 79% of the global textile market uses synthetic filament yarn, would push international buyers to divert orders to Pakistan's competitors like Bangladesh, Vietnam or Cambodia. Simultaneously, the Pakistan Hosiery Manufacturers Association (PHMA) called on the government to abolish the outdated peak and off-peak electricity tariff structure. In a letter sent to top government officials, the PHMA highlighted that the peak-hour surcharge policy was introduced to curb consumption during critical power shortages. However, the energy scenario has changed significantly, with Pakistan now having a surplus generation capacity and even exploring electricity exports. Under such circumstances, the PHMA argued, the rationale for maintaining peak and off-peak tariff differential has completely vanished. PHMA Zonal Chairman Abdul Hameed noted that exporters in the hosiery and textile sector, operating 24/7 to meet global deadlines, were struggling with competitiveness challenges due to high electricity charges during peak hours. Fluctuating tariffs force industries to change production schedules, reducing efficiency and increasing overall costs, which weakens Pakistan's position internationally. Hameed emphasised that the surplus power situation presents a clear opportunity for reform.
Business Recorder
02-05-2025
- Business
- Business Recorder
Pakistan, Bangladesh garment manufacturers sign MoUs
LAHORE: Key milestones were achieved in strengthening trade ties between Pakistan and Bangladesh textile sectors during a recent visit, marked by the signing of three crucial Memorandums of Understanding (MoUs). The Pakistan Readymade Garment Manufacturers & Exporters Association (PRGMEA) signed MoUs with both the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA), while the Pakistan Hosiery Manufacturers Association (PHMA) signed an MoU with the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Further demonstrating the growing interest in bilateral trade, the Export Promotion Bureau (EPB) of Bangladesh expressed a strong interest in forging an MoU with the Trade Development Authority of Pakistan (TDAP). The Bangladesh Garment Buying House Association (BGBA) also conveyed their intention to explore opening an office in Pakistan. The visit facilitated over 250 productive Business-to-Business (B2B) meetings, resulting in confirmed orders for yarn and fabric amounting to USD 2.5 million. Additionally, sample orders totaling an estimated USD 10 million, subject to sample approval, were placed, indicating significant future trade potential. In a gesture of further collaboration, PRGMEA extended an invitation to the textile delegations from BGMEA and BTMA to visit Pakistan in the near future to follow up on the business activities initiated during this successful visit. This invitation reflects the commitment to fostering ongoing cooperation and expanding trade opportunities between the two nations. Copyright Business Recorder, 2025
Business Recorder
01-05-2025
- Business
- Business Recorder
Apparel sector: PRGMEA, BGMEA sign MoU to drive export growth
KARACHI: In a significant step towards strengthening trade and investment ties between Pakistan and Bangladesh, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) have signed a Memorandum of Understanding (MoU). The MoU was signed on April 28 at a local hotel in Dhaka by BGMEA Administrator Anwar Hossain and PRGMEA Vice Chairman-Central, Aamir Reyaz Chottani. The ceremony was attended by notable dignitaries, including Commerce Adviser SK Bashir Uddin and Pakistan's High Commissioner to Bangladesh Syed Ahmed Maroof. Key highlights of the MoU knowledge exchange: Sharing best practices and expertise to drive growth and competitiveness in the apparel exports sector. Industrial Collaboration: Exploring opportunities for joint ventures and partnerships to enhance industrial capacity and productivity. Exchange of business delegation: Facilitating visits and exchanges to foster trade and investment between the two countries. Participation in Trade Exhibitions: Encouraging participation in each other's trade exhibitions to showcase products and services. Shared objectives: The MoU emphasizes the shared objective of driving sustainable growth, enhancing competitiveness, and leveraging the complementary strengths of both countries' garment and textile industries. This collaboration aims to unlock new opportunities and promote deeper engagement between the two major players in the global apparel market. 'This MoU marks a significant milestone in our efforts to strengthen trade and investment ties between Pakistan and Bangladesh. We look forward to working closely with BGMEA to enhance collaboration in the apparel exports sector,' said Aamir Reyaz Chottani, Vice Chairman-Central, PRGMEA. 'We are excited to partner with PRGMEA and explore new opportunities for mutually beneficial cooperation. This collaboration will enable us to leverage each other's strengths and enhance our competitiveness in the global market,' said Anwar Hossain, Administrator, BGMEA. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is the premier trade body representing the garment industry in Bangladesh. The Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) is a leading trade association representing the interests of garment manufacturers and exporters in Pakistan. Copyright Business Recorder, 2025
