Latest news with #PakistanReadymadeGarmentsManufacturersandExportersAssociation
Business Recorder
2 days 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 Yet, import of such essential raw materials remains hindered by duties and outdated regulations.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
Express Tribune
6 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.
Express Tribune
17-03-2025
- Business
- Express Tribune
EFS amendments feared to harm apparel sector
The surge in cloth prices and tailoring charges has prompted most citizens to prefer stitched garments The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has opposed the recent amendments to the Export Facilitation Scheme (EFS), warning they will harm the apparel sector, particularly the small and medium enterprises (SMEs). In a statement, former PRGMEA chairman Ijaz Khokhar urged the Federal Board of Revenue (FBR) to take strict action against the companies that had misused the EFS facility instead of penalising the entire export sector. He emphasised that SME exporters were already struggling and there was a need to delay the amendments, which would prevent further damage. A major concern is the reduced utilisation period for the imported raw material, now capped at nine months, with extensions requiring approval of a board committee. The apparel production involves multiple steps including designing, sourcing, manufacturing and shipping. Such a restrictive time frame would make it difficult for the exporters to meet commitments, he said. Another issue is the requirement of bank guarantee for the enhanced face value, which disproportionately affects the SMEs. Many lacked financial resources to secure such guarantees, potentially barring them from essential export facilitation benefits, he said, adding that the policy limited their ability to expand into international markets. He voiced fear that the amendments introduced through the SRO 301(I)/2025 would weaken Pakistan's competitiveness in apparel exports. The industry is already grappling with rising production costs, energy shortages and logistical challenges. Additional regulatory burdens will only worsen the situation, threatening jobs and the export potential. Khokhar noted that global buyers were highly sensitive to the delivery timelines and bureaucratic delays could result in losing the orders. "The new amendments impose unrealistic restrictions on the utilisation of raw material and require bank guarantees that the SMEs cannot afford. These policies will negatively impact Pakistan's export growth and textile sector," he remarked. The ex-chairman also expressed concern over the increased compliance burden and policy uncertainty, which could weaken Pakistan's position against regional competitors like Bangladesh and Vietnam. The exporters need a streamlined, transparent system to facilitate trade rather than complex regulations that lead to delays and additional costs. They are already navigating economic challenges, including the fluctuating currency rates and increasing freight costs. Introducing more hurdles will only make it harder for them to sustain operations.
Express Tribune
06-02-2025
- Business
- Express Tribune
Call to fast-track carbon policy
Listen to article LAHORE: Garment manufacturers and exporters have said that Pakistan's first-ever National Carbon Market Policy, launched in November last year, demonstrates the country's commitment to emissions reduction but it lags behind regional counterparts in ambition, sector-specific coverage and global integration, potentially limiting its effectiveness in attracting climate finance and investment. In a statement, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Regional Chairman Dr Ayyaz Uddin observed that the new policy marked a significant step towards integrating carbon trading into the broader climate strategy. The policy suggested that the government could encourage investment in carbon capture and storage as well as renewable energy through public-private partnerships, besides revising the high Carbon Adjustment Factor to a more flexible rate by ensuring participation of startups and SMEs. He recommended the launch of nationwide awareness campaigns and capacity-building programmes to involve communities and private sector as well as called for decentralising governance, encouraging regional collaboration and enabling cross-border carbon trading. Ayyaz Uddin stated that the government had pledged to reduce greenhouse gas (GHG) emissions by 50% by 2030, with 15% being unconditional and 35% depending on international support. Meanwhile, India has pledged 45% reduction in emissions intensity by 2030 and China has set the goal of peaking emissions by 2030 and achieving carbon neutrality by 2060. Bangladesh's Nationally Determined Contributions (NDCs) envisage an unconditional reduction of 12 million tons (5%) in GHG emissions from the business-as-usual scenario by 2030 and conditional reduction of 24 million tons (10%) with support from the international community. Bangladesh also has a strong focus on renewable energy. The PRGMEA regional chairman was of the view that sector-specific coverage for Pakistan was narrow, where sectors having high emissions such as cement, steel and transportation were underrepresented in the country's strategy while regional peers – India and China – prioritised those industries. Advanced technologies such as carbon capture and storage, and green hydrogen production were also areas where Pakistan lagged behind, he stated. He noted that the government was currently developing a nascent voluntary carbon market and was operating without a formal compliance framework. In comparison, India's market is more mature with a well-established PAT Scheme (since 2012) and discussions underway for a broader carbon trading mechanism. Meanwhile, Ghana is in an emerging phase, with initiatives largely centred on REDD+ (Reducing Emissions from Deforestation and Forest Degradation) projects. Ayyaz Uddin pointed out that Pakistan's carbon market efforts were currently focused on sectors such as agriculture and a developing energy sector. This contrasts with India's emphasis on heavy industry, including cement, steel, aluminium and power, Ghana's focus on forestry alongside renewable energy and transport, and Bangladesh's concentration on renewable energy (primarily solar and wind) and agriculture. By addressing such challenges, Pakistan can strengthen its carbon market policy, attract international investments and become a key player in global climate action. While the 2024 policy was a step forward, bold reforms and enhanced integration with international markets would be crucial for achieving climate targets, he remarked.
