Latest news with #PakistanTextileCouncil
Business Recorder
7 days ago
- Business
- Business Recorder
PTA talks with US: PTC urges govt to consult industry experts
ISLAMABAD: The Pakistan Textile Council (PTC) has proposed that the government engage a team of industry experts before initiating talks on a Preferential Trade Agreement (PTA) with the United States. Commenting on the recently signed pact between Pakistan and the US, the PTC noted that while there is some clarity regarding tariffs, considerable uncertainty remains for the months ahead. To understand the context, it's important to recap recent developments. On April 2, 2025, the US imposed a 29 percent reciprocal tariff on Pakistan—similar to what it imposed on other countries—on top of the existing Most Favoured Nation (MFN) tariffs. A week later, Washington announced a 90-day pause, applying a baseline tariff of 10 percent (MFN + 10 percent) until July 9, which was later extended to August 1, 2025 Exports to US to face 19pc tariffs The PTC is of the view that following 'comprehensive negotiations,' a 19 percent tariff was agreed upon for Pakistan, which some quarters have hailed as a success. While it's true that Pakistan's position is not worse than that of its competitors, the imposed tariff remains significantly high. Industry stakeholders had expected a lower reciprocal tariff, in the range of 10–15 percent, especially after high-level visits by the Deputy Prime Minister and the Finance Minister to Washington. Pakistan reportedly offered to reduce its $2.9 billion trade deficit with the US by importing American cotton worth \$1 billion, oil-related products worth $1.2 billion, and other goods like soybeans. The government also proposed removing non-tariff barriers identified in the US Trade Representative's report. Despite these offers, the outcome of the negotiations has been 'neutral,' if not disappointing. According to the PTC, Pakistan's main competitors in the US market—Vietnam, Cambodia, Sri Lanka, and Bangladesh—are now subject to duties ranging from 19–20 percent (MFN+). Only India faces a higher 25 percent reciprocal tariff. However, given India's competitive cost structure, fiscal support, and export incentives, the 6 percent tariff difference is likely to be absorbed by Indian exporters. Consequently, Pakistan is unlikely to gain or lose significant market share in the apparel segment. That said, some US-based buyers of home textiles might consider shifting sourcing to Pakistan if India's tariffs remain unchanged. Another critical factor is the rules of origin. Former President Trump's executive orders specified that transhipped goods would attract higher duties. The orders further stated: 'Certain foreign trading partners identified in Annex I to this order have agreed to, or are on the verge of concluding, meaningful trade and security agreements with the United States. Goods of those trading partners will remain subject to the additional ad valorem duties… until such time as those agreements are concluded.' said PTC. This implies that tariffs on countries like Pakistan, Vietnam, and Indonesia could be revised—upward or downward—based on the final agreements. If a clause requires that only US or Pakistani-origin raw materials be used, Chinese raw materials would need to be replaced, impacting SME exporters who rely on China for quality, affordable inputs. For reference, the US has imposed additional tariffs of 30 percent on Chinese-manufactured man-made fiber (MMF) apparel and 37.5 percent on cotton-based apparel. In comparison, Pakistan faces a 19% tariff. However, China's low production costs allow it to absorb these tariffs, although many major US retailers are looking to shift sourcing out of China due to broader uncertainty. One side effect is that China—and India—could dump unsold textile goods into markets like the EU and UK, intensifying competition for Pakistan in those regions. The average US tariffs have now increased to 15.3 percent. It's estimated that the US government could earn $420 billion from these duties. As manufacturers and retailers are unlikely to absorb this cost, it will be passed on to US consumers, potentially fuelling inflation. According to industry experts, this could compress textile and apparel demand by 5–10 percent. PTC emphasized that for Pakistan to offer concessions to the US, it must sign a formal PTA, as required under WTO rules. During these negotiations, Pakistan should insist on duty-free access for key export products. If properly negotiated, such a PTA could deliver the benefits Pakistan is seeking. However, the PTC stressed that the government must include seasoned industry experts—alongside official negotiators—to ensure Pakistan secures the most favourable terms. Copyright Business Recorder, 2025
Express Tribune
03-08-2025
- Business
- Express Tribune
Textile industry slams EFS changes
Listen to article The Pakistan Textile Council (PTC) has strongly criticised the Federal Board of Revenue's (FBR) recent amendments to the Export Facilitation Scheme (EFS), warning that the changes pose a direct threat to the survival of the country's textile and apparel exports. PTC, which accounts for over 30% of the country's textile and apparel exports, has submitted a formal set of objections and recommendations to the FBR in response to SRO 1359(1)/2025 dated July 29, 2025. The PTC's submission, in line with the five-day window provided for feedback, strongly criticises the recent amendments to the EFS, warning that the changes could paralyse Pakistan's value-added export sector at a time of heightened global economic uncertainty. It stressed that the EFS ensures competitiveness for textile and apparel exporters. However, the amendments have not only overlooked recommendations of a high-level government committee, led by Planning Minister Ahsan Iqbal, but have also introduced restrictive and impractical conditions that threaten the sector's survival. One of the most damaging provisions, according to the PTC, is the exclusion of cotton, cotton yarn and grey cloth from the scope of the EFS. "This clause must be immediately withdrawn," the council stated, as it was never agreed that those materials would be excluded. At most, a refundable general sales tax (GST) on cotton yarn above a certain count was under discussion. "Their blanket removal from the scheme is unjustified and economically reckless." PTC Chairman Fawad Anwar termed the move a "tax on exports," saying that it would impose a severe financial burden on exporters already grappling with global protectionism, rising input costs and new trade barriers, including the recently imposed reciprocal duties by the United States. "The timing could not be worse. Exporters are under stress and instead of supporting them, the government is pushing policies that increase costs and complicate operations," he said. The PTC's policy note recommended that input utilisation period should remain at 18 months, with the possibility of a six-month extension by the regulatory authority. Any extension beyond that should be subject to approval by an FBR-appointed committee. Additionally, the council suggests that unused input materials should be allowed to be carried forward into the following year upon submission of a reconciliation statement. The authorisation mechanism for input acquisition should be more flexible. For new EFS users, the regulatory authority may approve provisional authorisation up to 50% of the claimed production capacity, with the remainder granted upon capacity verification by the Input Output Coefficient Organisation (IOCO). Furthermore, annual authorisation should be automatically triggered following submission of reconciliation statements via the Web Based One Customs (WeBOC) or Pakistan Single Window (PSW) system, subject to post-audit adjustments. The council urged the FBR to shift from bank guarantees to insurance guarantees, noting that the latter would significantly reduce the compliance burden and financial stress for exporters. It highlighted the operational impracticality of new vendor restrictions in toll manufacturing. Under the current amendment, goods sent for outside processing must be returned within 60 days, vendor details must be pre-recorded and any subsequent changes require prior collectorate approval. The PTC argued that these requirements are unnecessarily rigid and disrupt operational flexibility and negotiations with sub-contractors. It urged the removal of excessive data requirements, such as vehicle numbers, and called for the extension of toll manufacturing duration. The council rejected the proposed rule mandating physical sampling to verify the utilisation of imported inputs. It called for the reinstatement of the original examination-marked sampling provisions, emphasising that the new rule would delay exports and create bottlenecks in the verification process. Finally, and most critically, the PTC demanded the immediate reversal of the exclusion of cotton, cotton yarn and grey cloth from the EFS. These materials are fundamental to the textile value chain and excluding them will force exporters to bear upfront import duties and taxes despite being net foreign exchange earners.
Business Recorder
02-08-2025
- Business
- Business Recorder
SRO 1359(I)/2025: FBR amendments irk Pakistan Textile Council
ISLAMABAD: The Pakistan Textile Council (PTC) has voiced serious concern over the recent amendments notified by the Federal Board of Revenue (FBR) through SRO 1359(I)/2025, which it says, if implemented in their current form, will critically damage Pakistan's textile and apparel exports at a time when the sector is already under immense external pressure. According to PTC, despite the formation of a high-level committee (chaired by Ahsan Iqbal) by the Prime Minister to review and rationalize the Export Facilitation Scheme (EFS) in consultation with the private sector, the recommendations of the committee — based on weeks of consultations and stakeholder consensus — have been completely disregarded. The Council maintained that the newly notified amendments have bulldozed recommendations of the committee without addressing the industry's core concerns. The most damaging provision is the exclusion of essential raw materials including cotton, cotton yarn, and grey cloth from the scope of EFS. These materials form the backbone of Pakistan's textile value chain. Their exclusion will mean exporters must now pay import duties and sales tax upfront—despite being export-oriented entities that generate vital foreign exchange for the country. Pakistan Textile Council voices concerns over proposed amendments to EFS 'This is effectively a tax on exports,' Fawad Anwar, Chairman of PTC said adding that it is unfathomable that at a time when Pakistan is struggling to stabilize its economy and secure foreign exchange, the government would take steps that make it harder — not easier — for exporters to survive. The PTC has submitted detailed objections and policy recommendations to the Chairman FBR, Rashid Langrial, and has formally escalated the issue to the Prime Minister's Office, Minister for Planning, Minister for Commerce, and Minister for Finance. The Council has urged the government to immediately withdraw the exclusion clause and reconsider other restrictive provisions that will paralyze the EFS regime. Key objections raised by PTC include: (i) the input utilization period should remain at least 18 months for all EFS users, with reconciliation statements submitted as per rules; (ii) permitting provisional authorization for new EFS users based on declared capacity; (iii) replacing bank guarantees with insurance guarantees to reduce cost of compliance; (iv) relaxing toll manufacturing restrictions, including impractical 60-day limits and vendor detail requirements; (v) reversing the proposed drawl of intrusive physical sampling rules; and (vi) maintaining EFS coverage for cotton, yarn, and grey cloth, which was never agreed to be excluded from EFS. PTC, in its letter to Chairman FBR has claimed that It was only agreed that GST (refundable) may be imposed on cotton yarn with count 43/s and above and not exclusion from EFS. The clause of exclusion of Cotton, cotton yarn and grey cloth from EFS may be immediately withdrawn. 'These changes are being introduced when Pakistan's textile and apparel exports are already threatened by rising global protectionism, including recent reciprocal duties imposed by the United States on Pakistani goods, which is expected to further erode export competitiveness,' the Council said, strongly urging the government of Pakistan to intervene and suspend the enforcement of these amendments until a consensus-based revision is undertaken in line with the recommendations of the PM-mandated committee. Copyright Business Recorder, 2025
Business Recorder
02-08-2025
- Business
- Business Recorder
PTC warns FBR's new amendments will cripple Pakistan's textile exports
The Pakistan Textile Council (PTC), a not-for-profit research and advocacy platform, has raised concerns over recent amendments to the Export Facilitation Scheme (EFS) notified by the Federal Board of Revenue (FBR), warning that the changes, particularly the exclusion of key raw materials like cotton and yarn, will severely undermine the country's textile exports. In a press statement released on Saturday, PTC said that the amendments notified by the FBR through SRO 1359(I)/2025, which, if implemented in their current form, 'will critically damage Pakistan's textile and apparel exports at a time when the sector is already under immense external pressure'. 'PTC strongly urges the Government of Pakistan to intervene and suspend the enforcement of these amendments until a consensus-based revision is undertaken in line with the recommendations of the PM-mandated committee,' it said. As per the statement, PTC noted that despite the formation of a high-level committee, chaired by Planning Minister Ahsan Iqbal, to review and rationalise the EFS in consultation with the private sector, the recommendations of the committee 'have been completely disregarded'. 'The newly notified amendments have bulldozed recommendations of the committee without addressing the industry's core concerns. The most damaging provision is the exclusion of essential raw materials, including cotton, cotton yarn, and grey cloth, from the scope of EFS,' PTC said. The council elaborated that these materials form the backbone of Pakistan's textile value chain and their exclusion will mean exporters must now pay import duties and sales tax upfront—despite being export-oriented entities that generate vital foreign exchange for the country. 'This is effectively a tax on exports,' said Fawad Anwar, Chairman of PTC. 'It is unfathomable that at a time when Pakistan is struggling to stabilise its economy and secure foreign exchange, the government would take steps that make it harder—not easier—for exporters to survive.' Pakistan Textile Council voices concerns over proposed amendments to EFS The PTC shared that it has submitted detailed objections and policy recommendations to Chairman FBR, Rashid Langrial, and has formally escalated the issue to the Prime Minister's Office, Minister for Planning, Minister for Commerce, and Minister for Finance. The council urged the government to immediately withdraw the exclusion clause and reconsider other restrictive provisions that will paralyse the EFS regime. Key objections raised by PTC include: • The input utilisation period should remain at least 18 months for all EFS users, with reconciliation statements submitted as per rules. • Permitting provisional authorisation for new EFS users based on declared capacity. • Replacing bank guarantees with insurance guarantees to reduce cost of compliance. • Relaxing toll manufacturing restrictions, including impractical 60-day limits and vendor detail requirements. • Reversing the proposed drawl of intrusive physical sampling rules. • Maintaining EFS coverage for cotton, yarn, and grey cloth, which was never agreed to be excluded from EFS. 'These changes are being introduced when Pakistan's textile and apparel exports are already threatened by rising global protectionism, including recent reciprocal duties imposed by the United States on Pakistani goods, which is expected to further erode export competitiveness,' it warned.
Business Recorder
24-05-2025
- Business
- Business Recorder
PTC says textile sector can add $3–4bn in export earnings
The Pakistan Textile Council (PTC), a not-for-profit research and advocacy platform, says that the industry could immediately contribute $3-4 billion in annual exports, in line with the vision and policies of the federal government, if an enabling environment is provided. The remarks were by PTC Chairman Fawad Anwar during his meeting with Federal Minister for Commerce Jam Kamal Khan. The PTC delegation also included Asif Tata (Chairman, Naveena Group) and CEO Muhammad H. Shafqaat, read a statement released by the Ministry of Commerce on Saturday. PTC says concerned at proposed amendments to EFS The meeting focused on tariff and tax rationalisation, energy pricing, green investments, and other policy interventions needed for competitiveness, sustainability and growth of the textiles and apparel sector. During the meeting, the commerce minister assured the delegation of the government's commitment to supporting the export sectors in the upcoming federal budget. 'We are working towards regional tariff parity,' Jam Kamal stated. The minister informed that a committee, led by Finance Minister Muhammad Aurangzeb, has been constituted to develop a sustainable framework for tariff rationalisation. 'We must strike a balance—reductions will come with time, however, the government is committed to supporting industrial growth,' he noted. Pakistan Textile Council voices concerns over proposed amendments to EFS Specific matters such as the regionally competitive energy tariffs, effective utilisation of the Export Development Fund, and the immediate clearance of claims under government support schemes were discussed. The PTC also recommended the introduction of Green Credit Schemes to help the sector meet international sustainability requirements and scale up the efforts towards industrial decarbonization. The delegation highlighted that much of the industry is already shifting to alternative renewable energy sources such as solar, biomass and wind, and the government support remains vital to maintain momentum. Kamal reiterated the government's resolve to align economic policy with the needs of exporters and underscored the urgency of reforms. 'Let the formal industry grow, invest and spur industrial growth. That's how the economy thrives.'
