PTI’s Draft

Textile Policy 2018-2023

Prepared by

Mr. Zafar Iqbal Sarwar

With consultation of all Stakeholders
 Sessions
Faisalabad Lahore Islamabad Karachi

Members on Board
PTEA
APTMA

PHMA
APBUMA
APTPMA
 Policy Statement
This Policy aims to strengthen and improve Textile Sector of Pakistan in
order to become global leader in value added textile export.

Vision

Textile is a major sector of Pakistan Economy, with great potential of

value addition. This Policy intends to increase its share in GDP and
export by carrying out structural reforms.
 Policy Objectives
1. To become world market leader by increasing significant
value added exports.
2. To increase cotton production.
3. To facilitate additional investment in machinery and
technology.
4. To improve product mix.
5. To strengthen Small and Medium Enterprises.
6. To promote vocational training.
7. To ensure productive Research and Development in the
sector.
8. To increase Ease of Doing Business.
9. To reduce Cost of Doing Business.
 1. Energy
 PTI believes that energy costs (electricity, gas and other fuels)
should be regionally competitive; proposed price
Electricity:
Proposed price US Cents 7.50/KWh
(1 USD = PKR 105.12 based on one year average before devaluation)
Electricity Costs US Cents / KWh
12

10 11
8 9
8.3
6 7 7.3
US Cents / KWh

0
Vietnam Bangladesh China India Pakistan

Source: http://pkonweb.com/infographics/
/
http://www.india-briefing.com/news/industrial-power-rates-india-11062.html
http://china-businesspark.com/businessparks/province/shanghai/Shanghai%20Spark%20Development%20Zone%20Xinghuo.htm
http://viipip.com/homeen/?module=compareip&ipId1=129&ipId2=156&ipId3=77
 Gas:
Gas rate should be across the board and proposed rate is 6.50 USD / MMBTU;
Current Rates:
GAS RATE: USD. 5.71/MMBTU+1.90(GIDC)=USAGE 28%
RLNG: USD 10.94/MMBTU = USAGE 72%
AVERAGE PRICE: USD 10.01/MMBTU
Special Notes: Current devaluation will effect further increase in RLNG
(1 USD = PKR 105.12 based on one year average before devaluation)

Source: http://pkonweb.com/infographics/ https://www.docdroid.net/rFOgyN5/vt.docx

http://egazette.nic.in/WriteReadData/2016/171314.pdf/ http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2017/circ28-2017cs.pdf
http://www.excisedaman.gov.in/pdf/Trade%20Notice%20No.%2005%20of%202017-18.pdf
 2. Budgetary Relief
 Current Textile Relief Package will be extended without any condition of increase
10%.(Greige fabric + Yarn @ 4%,Proocessed Fabric @5%,Made-ups @ 6%,Garments @
7%)
 Regional comparison is as follows;
Incentives/Rebates on investment, production and exports
Bangladesh China India Vietnam Pakistan
4% on apparel *Interest free loans, Duty drawbacks Tax break of 10-17 Drawbacks of
export, additional 50% tax break, 4 cent from 2.5% to 11.5%, % 4-7%
5% on use of elec., 50% refund of additional 5%
domestic yarn and land route expenses. compensatory
fabrics. rebate to match
GSP+ to Pakistan
*Textile Industry in Xinjiang Province.
https://www.docdroid.net/rFOgyN5/vt.docx
http://egazette.nic.in/WriteReadData/2016/171314.pdf/ http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-
2017/circ28-2017cs.pdf http://www.excisedaman.gov.in/pdf/Trade%20Notice%20No.%2005%20of%202017-18.pdf

 Blocked refund of Income Tax, Sales Tax and all other refunds due from Government will be
immediately released.
 Subsequent refu d orders issued will take for of Negotiable I stru e ts .
 Export oriented sector will be 100% zero rated (Exporters are paying sale tax on value addition
accessories and no refund is made).
 3. Economic Measures
Currency should be regulated by State Bank
based on economical fundamentals and not by
finance ministry based on political parameters.
Direct shipment model will be supported .
 4. Product Mix/Man–Made Fibers (Report)
 we will facilitate the transition of Pakistan product mix to match the currant
international market preference
World Data (The increase of the world fiber market consumption was 1.5% up to 99 million
tons in 2016e according preliminary calculation. Oil-based synthetic fibers had the biggest share
with 62.7%. Cellulosic and protein-based fibers consist of cotton (around 24.3%), wood-based
cellulose fibers (around 6.6%), other natural fibers (around 5.3%) and wool (around 1.1%) .

Demand 2016 Global Forecast

Sources: ICAC, CIRFS, TFY, FEB, Lenzing estimates

 5. GSP Plus Plan
 Special focus will be given to ensure continuity of GSP+ status
of Pakistan. Lobbying in EU will be strengthened by our
foreign missions with the help of trade regulatory authorities
in Pakistan.
 Social compliance is the major factor of GSP plus status. Strict
action will be taken to ensure waste / environmental
technologies & enforcement of social compliant laws. Public
private partnership will be encouraged
 6. Research and Development in Cotton and
Textile Sector
Despite existence of research institutes, the average yield of
Cotton Crop is dropping. PTI believes that the following measure
will be taken in order to enhance cotton crop in Pakistan;

 Textile Research Forum will be formulated

 Introduction of genetically modified new seeds which give
better yield and can grow in areas where water is scarce
 Production of Organic Cotton will be encouraged
 It will be ensured that right prices are paid to farmer
 7. Modern Textile Laboratories
 PTI will facilitate all testing to be done in Pakistan.
Internationally Accredited Labs will be encouraged to
bring their testing facilities to Pakistan.

 Europe is diverting to GPP (Green Product

Procurement), special focus will be given to install
testi g e uip e t fo ha ful su sta es” in
Pakistan.
 8. Facilitation of Manufacturing of Textile
Machinery in Pakistan
Joint Ventures/investments will be encouraged to
establish Textile Machinery Manufacturing/Up-
Gradation Plants in Pakistan.
PTI will support and facilitate such ventures, which
will bring foreign direct investment and expertise
in Pakistan.
 9. Allied Industries
(Supportive Industries For Value Added Textiles)

Steps will be taken to ensure that all required input is

produced / manufactured in Pakistan to the extent
economically viable.
Allied industries to Export Oriented Industries will
also be treated as subsidiary Export Oriented
Industries. Export sector cannot survive without
strengthening the allied industries.
10. PTI supportive Marketing Plan
Expo / trade delegation in Pakistan /Abroad,
performance of commercial counselors , reform in
PTAs and FTAs, Made in Pakistan brand, Bringing of
Amazon, eBay, alibaba in Pakistan, engaging overseas
Pakistan and visa facilitation.
 11. Reform Existing Industrial Zones
PTI will take steps to improve existing zones (Lahore,
Faisalabad, Karachi, Multan, Sialkot) to get them
fully operational under one window all issues being
faced by industrialists will be addressed swiftly and
transparently, without any prejudice in these zones.
Special focus will be on multi fiber production based
industries.
12. Human Resource Development
Special Courses tailored to fulfill the needs of
the Textile Industry (ginning, spinning,
weaving, stitching etc.) will be introduced in
Vocational Training Institutes.
Design and Fashion Institute will be
encouraged to introduce fashion brands in
international markets according to their
trends.