The Pakistani government on Wednesday announced the first ever five-year Textile Policy 2009-2014 that aims at taking the country's textile exports from the existing 10 billion U.S. dollars to 25 billion by the year 2015, local media reported Thursday.
A special cabinet meeting chaired by Pakistani Prime Minister Yousaf Raza Gilani approved the policy.
Gilani said the introduction of a quota-free trade regime posed more challenges for the country's ill-prepared textile industry and hoped that the policy would help it overcome the challenges.
Under the policy, the textile sector would enjoy 42 billion rupees (about 520 million dollars) in subsidies and incentives during the fiscal year 2009-2010.
The policy also exempts the textile industry from load shedding and allows it prioritized gas supply.
The government has also subsidized the export refinance with a reduced rate of 5 percent and 2.5 billion rupee (about 30 million dollars) allocation. The policy allocates 5-billion-rupee relief on the existing long-term loans of the textile industry.
The policy offers duty drawbacks of between 1 percent and 3 percent for a two-year period for value-added textile exports to help the sector offset its direct and indirect costs.
All textile machinery imports will be zero-rated to encourage new investments.
Also, a Technology Upgradation Fund (TUF) will contribute up to 20 percent of capital cost as a grant.
For this purpose, the government allocated 1.6 billion rupees (about 20 million dollars), which will increase to 17 billion rupees (about 210 million dollars) by 2014.
The prime minister said the recent global financial meltdown and sharp falls in trade volumes have thrown up new challenges. In 2008, Pakistan's total exports were down by 6.7 percent and textile exports 9.5 percent mainly because of global demand shrinkage, he added.
Textile sector, Gilani said, has been the major provider and foreign exchange earner and must continue to be so. He said focus on this sector should give a clear message that this government puts poverty alleviation, job generation and industrial development very high on its agenda and is taking all possible steps in this direction.
