TAHIR AMIN
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is expected to approve five-year Textile Policy (2014-19) today (Thursday) envisaging textile exports at $26 billion, besides creating three million jobs, official sources revealed.
According to sources, the Textile Policy was on the agenda of the ECC meeting on Wednesday, however due to shortage of time the item would be discussed during the Thursday’s meeting. The Textile Ministry has already briefed the Finance Minister about the new policy and the committee is likely to approve it.
The policy would require about Rs 120 billion including Rs 45 billion outstanding amount under different schemes of the previous policy to fully implement the new policy. The government will adopt measures to give priority to textile sector for availability of gas and electricity to fully utilise the GSP Plus status.
The policy goals include doubling value-addition from one billion per million bales to $2 billion per million bales, doubling textile exports from $13 billion to $26 billion, facilitating additional investment of $5 billion in machinery and technology, facilitating the creation of 3 million jobs, reviving sick textile units, improving fiber mix and product mix especially in the garment sector and SME sector will be the focus of added growth in value-added products through hand-holding schemes.
According to the documents, Textile Policy (2014-19) is based on actionable plans to make the sector competitive and sustainable. The ministry has adopted a five-pronged strategy to increase exports and fully utilise the potential of this sector. The main theme of the current policy is to reduce the dependence on factor endowments which give comparative advantage, and to increase the use of new technologies, especially ICT options, for improving competitiveness of the entire textile value chain. As announced in the Finance Bill 2014-15, a sum of approximately Rs 80 billion has been earmarked for the textile sector support schemes over a period of five years.
Duty drawback for local taxes and levies would be given to exporters of textile products on FOB values of their enhanced exports on an incremental basis if increased beyond 10 percent over previous year’s exports at the following rates: garments 4 percent, made ups 2 percent and processed fabric one percent. Incentives will be provided to exports in 2013-14 (calendar year 2014) compared to exports in 2012-13 (calendar year 2013). Mark-up rate for Export Refinance Scheme of State Bank of Pakistan is being reduced from 9.4 percent to 7.5 percent from July 1, 2014. Textile industry units in the value added sector would be provided Long Term Financing Facility (LTFF) for upgradation of technology from State Bank of Pakistan at the rate of 9 percent for 3-10 years duration.
Textile sector enjoyed duty-free import of machinery under Textile Policy (2009-14). This facility (SRO809) has been extended for another two years. The tariff structure for the entire supply chain will be reviewed in line with effective protection rates, as proposed in the policy documents.
