Pakistan textile industry is unable to compete with the regional countries such as Bangladesh and China due to lack of access to European and American markets. Talking to Business Recorder here on Monday, the Federal Textile Industry Secretary said that Bangladesh and other countries in the region had easy access to the European and American market, which were the main importer of textile manufactures, while Pakistan was lacking that facility.
He said that labour in the neighbouring countries was also very cheap as compared to Pakistan. Therefore, the textile industry of Pakistan was lagging behind in the region. He further added that low utility cost of textile industry in the region was their plus point for growth as compared to Pakistan.
On the basis of regional comparison, Bangladesh's performance has been impressive. In 2006-07 fiscal year, it accounted for 76 percent of the country's total exports and provided jobs to 4.5 million people, accounted for 10.5 percent of the country's GDP and contributed 40 percent of its manufacturing output.
Exports have been growing at the rate of 18.2 percent in recent years. In contrast, the growth rate of Indian textile sector, which was 8.1 percent in 2005-06, improved slightly and touched 10.9 percent in 2006-07. Thereafter, it started declining and in 2007-08, the growth was half the rate of growth in the previous year.
The growth rate then declined drastically in 2008-09 (April-August) and stood at 0.8 percent. India's ranking went up from eighth to four, while Turkey, which ranked sixth in 2002, improved its standing to fifth. Likewise Bangladesh has also improved its share in the global market from 1.27 percent in 2002 to 1.86 percent in 2006, the analysts said.
It is important to mention that the Federal Board of Revenue (FBR) has proposed setting up of a Textiles Industry Group, including taxpayers and representatives of government.
The group would identify the main problems (non-compliance from the standpoint of government, but also burdens of compliance from the standpoint of taxpayer) and solutions that aim at prevention of tax evasion, etc. They would also have to look at end markets, and determine what the impact on demand would be with changes in tax administration. The arrangement may also help in creating business-friendly environment and harmony between industry and tax administration.
