PHMA flays withdrawal of concessional energy tariffs for export industry

The Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has flayed the government’s decision of discontinuing the concessional tariff for the export-oriented sector, asking the government to extend this competitive tariffs of electricity as well as gas beyond Sept 2022, as it would not be viable for the exporters to compete the world market.

Quoting an official memorandum issued by the ministry of energy, PHMA North Zone new chairman Naseer Butt said that the concessional tariff scheme to consumers of the export-oriented sector will be discontinued with effect from October 1, 2022, which is not good for the exporting sectors, especially for the value-added textile industry, as the Pakistan textiles’ exports have witnessed a jump of over 25 percent in the lead of knitted garments in the outgoing fiscal year of 2021-22. And with a view to sustain this growth in current fiscal year of 2022-23 the concessional tariffs of energy are vital, he stressed.

Naseer Butt observed that the knitwear sector remained number one export sector, with high export jump, crossing the level of $5 billion annually in last fiscal year. The export of the whole textile group was $19.329 billion out of Pakistan’s total annual exports of $31.79, also showing a surge of 25 percent mainly due to business-friendly policies of the government, including concessional tariff, which should now be continued, he added.

Demanding the continuation of concessionary energy tariffs for the export industry, he termed it totally imprudent and unwise decision of the government to discontinue the concessionary power tariff for the five export-oriented sectors, he said the move is disastrous, damaging the struggle of exporters to enhance exports.

PHMA zonal chief noted that not only tariff should be lower to the level of other regional countries, the textile sector should also get uninterrupted supply of energy to meet the orders on time, he said. He cautioned the government that unwise move of increasing energy tariffs for the exporters may sabotage the hard efforts of the exporters to enhance exports. He urged the government to continue supporting the five export-oriented sectors for the sake of economic stability, employment creation and revenue generation.

PHMA leader said that Pakistan’s exports of knitwear and other knitted garments and hosiery always play the leading role in exports growth, as the industry continued to show its resilience to the coronavirus pandemic in previous years. He said that the textile goods that contributed in positive trade growth included knitwear, exports of which increased from $3.815 billion in fiscal year 2020-21 to $5.120 billion in the recently concluding fiscal year of 2021-22, showing a growth of 34.23 percent, vindication of the fact that country needs more focus on value-added textile industry not the international donors to earn foreign exchange.

“The government should appreciate the value-added knitwear industry for achieving record exports in FY22 instead of withdrawing facilities. We hope the trend will continue with government’s full support to promote export culture.

While demanding more attention and focus of the government on export industry instead of borrowing from the IMF to bridge the huge gap of country’s trade deficit, he said that apparel sector can play leading role in earning foreign exchange and boosting exports.