As businesses reopen worldwide, manufacturing companies in Pakistan mainly in the textile sector are receiving orders from various exporting countries that could result in utilization of 80-90% production capacity by next quarter, leading towards an export of $17.5 billion in the financial year 2020-21.
The export earning of the textile sector is likely to increase by $3 billion this year keeping in view the demand in the international market, which will not only increase exports of the sector with a possible value of $17.5 billion but it could enhance the overall exports of the country by $27 billion in the next financial year, said All Pakistan Textile Mills Association (APTMA) in a letter sent to Prime Minister.
The export earnings of the textile sector will also support the dwindling foreign exchange earnings in case of dwindling inflows of remittances, the letter added.
However, textile exporters could also achieve these benchmarks if the government revisits the financial bill and introduces incentives for the sector, APTMA said.
APTMA demanded competitive pricing of energy including electricity and gas, asking the government should reduce the rate of sales tax and ensure quick issuance of refunds.
Further, the turnaround tax should be reduced from 1.5% to 0.5% for the textile exporters and manufacturers.
The export receipts of the country are likely to offset the projected 20% decline in remittances in the next financial year, moreover, it will contain the trade and current account deficit of the country in the next financial year, APTMA said.
The gradual increase in the production capacity of the textile sector will also provide support to local industries and generate employment for thousands of workers besides investments from foreign and local investors.