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Business Recorder
3 days ago
- Business
- Business Recorder
Export-oriented sectors on the brink, PRGMEA tells PM
LAHORE: Pakistan's $11 billion value-added export-oriented industry —contributing nearly one-third of the country's total exports — has issued a strong SOS appeal to Prime Minister Shehbaz Sharif, warning that recent budgetary measures are set to derail the export-oriented sectors at a critical time. In a joint statement, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), in collaboration with the top export-oriented associations including PHMA, SIMAP, PSGMEA, PGMEA, PLGMEA, PCSUMEA and Sialkot Chamber of Commerce, demanded the immediate revival of the Final Tax Regime (FTR) and restoration of the Export Facilitation Scheme (EFS) to its original structure. The appeal was endorsed by industry stalwarts including PRGMEA Chairman Dr Muhammad Ayyaz Uddin and former Central Chairman Sohail A Sheikh, Sialkot Chamber of Commerce and Industry (SCCI) President Ikram ul Haq, PSGMEA Chairman Khawaja Masud Akhtar — whose company's footballs are used in FIFA World Cup tournaments — SIMAP Chairman Zeeshan Tariq, PLGMEA Chairman Syed Ahtisham Mazhar, PHMA Chairman Abdul Hameed and former chairman Khawaja Mushraf, PGMEA Chairman Annas Raheel Barlas, PCSUMEA Chairman Muhammad Jamal Bhutta, Majid Bhutta, Ansar Aziz Puri, Sheikh Luqman Amin and other prominent exporters and business leaders. They expressed deep concern that despite government slogan of 'export-led growth,' the reality on the ground is entirely opposite. The Government always talks about promoting exports, but in practice, no department seems to be on board. They pointed out that in the entire budget speech, the finance minister uttered the word 'export' only once — and that too in a negative context while imposing duties on imported yarn under EFS. Addressing the Prime Minister directly, the joint statement said: 'Honourable Prime Minister, we urge you to intervene immediately. Please convene an emergent meeting with the leading export associations and the Sialkot Chamber before this budget is passed. If this situation persists, Pakistan's most reliable foreign exchange earning sector will suffer irreparable damage.' They stressed that in such a policy environment, the government's vision 'URAAN PAKISTAN' of taking exports to $100 billion is simply not possible. The industry leaders were clear: 'We're not asking subsidies, exemptions, or special treatment—just a level playing field to compete globally. Unfortunately, the current policies have drastically raised the cost of doing business and severely impacted ease of doing business. Work must begin on a war footing to restore confidence and streamline processes. International buyers are actively seeking long-term clarity and stability in the EFS framework, as Pakistan stands at a strategic moment to attract business being diverted from China. This opportunity must not be missed. They said the abolition of FTR and the breakdown of EFS have created chaos in the industry. The Final Tax Regime, which once offered a simple and predictable tax mechanism, has now been replaced by complex procedures, audits, and refund hurdles, particularly hurting small and medium (SMEs) exporters. Meanwhile, the EFS—once a vital mechanism for importing essential raw materials not produced locally, or required by buyers to use their nominated suppliers to meet international quality standards, such as specialized materials and technical fabrics — has been bogged down by unnecessary conditions, limiting access to critical inputs and undermining export competitiveness. Business leaders emphasize that it is time for Pakistan to strategically move beyond cotton and adopt a more diversified, innovation-driven approach to value-added apparel exports. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business
- Business Recorder
Pakistan's exporters urge PM to save value-added industry, seek FTR removal, EFS restoration
Pakistan's $11 billion value-added export-oriented industry—contributing nearly one-third of the country's total exports—has issued a strong SOS appeal to Prime Minister Shehbaz Sharif, warning that recent budgetary measures are set to derail the export-oriented sectors at a critical time. In a joint statement, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), in collaboration with the top export-oriented associations including PHMA, SIMAP, PSGMEA, PGMEA, PLGMEA, PCSUMEA and Sialkot Chamber of Commerce and Industry (SCCI), demanded the immediate revival of the Final Tax Regime (FTR) and restoration of the Export Facilitation Scheme (EFS) to its original structure. The appeal was endorsed by industry stalwarts including PRGMEA Chairman Dr Muhammad Ayyaz Uddin and former Central Chairman Sohail A. Sheikh, Sialkot Chamber of Commerce and Industry (SCCI) President Ikram ul Haq, PSGMEA Chairman Khawaja Masud Akhtar—whose company's footballs are used in FIFA World Cup tournaments — SIMAP Chairman Zeeshan Tariq, PLGMEA Chairman Syed Ahtisham Mazhar, PHMA Chairman Abdul Hameed and former chairman Khawaja Mushraf, PGMEA Chairman Annas Raheel Barlas, PCSUMEA Chairman Muhammad Jamal Bhutta, Majid Bhutta, Ansar Aziz Puri, Sheikh Luqman Amin and other prominent exporters and business leaders. The associations expressed deep concern that despite the government's slogan of 'export-led growth,' the reality on the ground is opposite. They pointed out that in the entire budget speech, the finance minister uttered the word 'export' only once, and that too in a negative context while imposing duties on imported yarn under EFS. Addressing the prime minister, the association urged the premier to convene an emergency meeting with the leading export associations and the SCCI before the budget is passed. 'If this situation persists, Pakistan's most reliable foreign exchange-earning sector will suffer irreparable damage.' They stressed that in such a policy environment, the government's vision of taking the country's exports to $100 billion is 'simply not possible'. 'We're not asking subsidies, exemptions, or special treatment—just a level playing field to compete globally. Unfortunately, the current policies have drastically raised the cost of doing business and severely impacted the ease of doing business,' the export associations stated. They said that international buyers are actively seeking long-term clarity and stability in the EFS framework, as Pakistan stands at a strategic moment to attract business being diverted from China. The exporters further said that the abolition of FTR and the breakdown of EFS have created chaos in the industry. 'The FTR, which once offered a simple and predictable tax mechanism, has now been replaced by complex procedures, audits, and refund hurdles, particularly hurting small and medium-sized (SMEs) exporters. 'Meanwhile, the EFS has been bogged down by unnecessary conditions, limiting access to critical inputs and undermining export competitiveness. Business leaders emphasise that it is time for Pakistan to strategically move beyond cotton and adopt a more diversified, innovation-driven approach to value-added apparel exports,' it added.
Business Recorder
07-06-2025
- Business
- Business Recorder
PRGMEA seeks targeted policy support in budget
KARACHI: In an urgent appeal to the government, the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has called for targeted policy support in the upcoming budget to address pressing challenges facing the country's value-added textile export sector. The association also urged the full and proper restoration of the Export Facilitation Scheme (EFS) and the Final Tax Regime (FTR). Representing a $4.9 billion export segment, the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has submitted a detailed communication to Prime Minister Shehbaz Sharif and Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production. In the letter, on behalf of PRGMEA, former Chairman Ijaz A Khokhar has highlighted six critical areas requiring urgent intervention: reinstatement of the EFS, restoration of the FTR, engagement on high US tariffs, clearance of refund backlogs, preparedness for the GSP+ review, and the launch of a national branding campaign to promote 'Made in Pakistan' garments. $60bn exports by 2029 target unachievable: MoC Khokhar also outlined a set of strategic policy recommendations aimed at restoring the sector's competitiveness, streamlining tax and refund mechanisms, and positioning Pakistan to benefit from evolving global trade trends He warned that without timely and targeted reforms, Pakistan risks losing its competitive edge at a time when global apparel buyers are diversifying away from traditional sourcing hubs, presenting a rare opportunity for local exporters. He has emphasized that continuity in policy, lower costs of doing business, and SME-focused facilitation is essential to unlocking the sector's true potential and advancing the Prime Minister's vision of achieving $100 billion in exports. PRGMEA urged the government to fully restore the original EFS framework, ensuring it remains a practical and enabling tool for the exporters. The recent changes in this scheme are highly restrictive and counterproductive, particularly for SMEs operating under Just-in-Time (JIT) and Never Out of Stock (NOS) export business models that require longer lead times and flexible inventory management, he added. Moreover, he suggested that any addition of sales tax within the EFS framework must be avoided, as it risks double taxation and imposes unnecessary financial and administrative burdens on exporters. Khokhar said that the demand by a sub-sector to exclude fabric and yarn from the EFS is not justified, particularly when it comes to technical and functional materials that are not produced locally as per international standards. In many cases, exporters are obligated to source specific fabrics or yarns from buyer-nominated suppliers to meet international quality and compliance standards, he mentioned. Restricting such imports under EFS would severely impact the competitiveness and operational viability of Pakistan's value-added apparel exporters. PRGMEA recommends that the EFS be reinstated in its original true letter and spirit, so that Pakistan's value-added textile industry can operate competitively, reliably, and sustainably in the global market. PRGMEA has urged the government to restore the FTR to simplify tax compliance, eliminate redundant audits, and improve the overall ease of doing business particularly for SMEs. PRGMEA recommends that the government, immediately engage US trade authorities to review the reciprocal tariff and advocate for GSP-like tariff relief or ESG-linked concessions for sustainably produced garments. Khokhar has strongly urged the government to implement a fully automated, time-bound refund mechanism to ensure uninterrupted cash flow for exporters as delays in the disbursement of sales tax refunds and customs rebates continue to create severe liquidity constraints, particularly for SMEs operating on tight margins. To expand Pakistan's global footprint, Khokhar has urged the Ministry of Commerce to launch a robust marketing and branding campaign for 'Made in Pakistan' garments. Trade fairs, B2B matchmaking, and digital outreach through embassies should be part of this drive, he added. Without concrete reforms, policy continuity, and timely facilitation, the true potential of this sector and its contribution toward national export targets will remain unrealized, he concluded. Copyright Business Recorder, 2025
Express Tribune
05-06-2025
- Business
- Express Tribune
Govt urged to restore EFS in original form
Listen to article Pakistan Hosiery Manufacturers Association Chairman Babar Khan has emphasised that the Export Facilitation Scheme (EFS) should be restored in its true spirit and local supplies should also be included in its scope as the scheme has contributed to boosting exports not only in the value-added sector but also across several non-traditional areas. Speaking at a press conference in Karachi on Wednesday, he noted that the process of depositing sales tax and receiving refunds was taking five to six months, which created liquidity issues. He was of the view that the spinners' lobby was demanding duties on yarn and fabric to maintain its monopoly and was misleading the government. "We make up to 70% value addition in imported cotton; therefore, we demand a long-term policy," Babar Khan said, adding that there was constant anxiety before every budget over possible policy changes. Karachi Chamber of Commerce and Industry (KCCI) President Jawed Bilwani claimed that the All Pakistan Textile Mills Association (Aptma) chairman had acknowledged during a Planning Commission meeting that the quality of their yarn was substandard. He emphasised that imported cotton was both cheaper and of better quality, which enabled exports of non-traditional products. The EFS supported exports after the downturn caused by Covid-19 and should continue as originally envisioned, he said and mentioned that all textile composite units were supporting their stance. In response to a question, Bilwani stated that the value-added sector had not misused the EFS and a real-time audit could be conducted, alleging that the misuse occurred in the iron and steel sector. He stressed that the scheme had opened up new export opportunities. Bilwani questioned how exports were increasing when hundreds of spinning units had shut down. He proposed that the government should give sales tax exemption on local cotton and yarn sales as well. Furthermore, he urged that utility tariffs for the spinning and export industries be aligned with those in the regional competitor countries. He recommended introducing a final tax regime instead of a normal one for export sectors and abolishing the advance tax collection. Meanwhile, at a joint press conference held at the PHMA Lahore office, the hosiery manufacturers and the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) demanded urgent action to restore the EFS in its original spirit. The request comes after local yarn and fabric producers demanded the withdrawal of the scheme, citing its misuse. The leadership jointly called on Prime Minister Shehbaz Sharif to intervene and halt policy shifts that were threatening to dismantle the EFS. They warned that the ongoing bureaucratic distortions, compounded by lobbying from the spinning sector for new tariffs, were pushing the small and medium enterprise (SME)-based apparel export industry towards serious crisis. PHMA Zonal Chairman Abdul Hameed and PRGMEA Regional Chairman Dr Ayyazuddin said the EFS had been introduced to allow duty-free import of raw material for exporters, giving Pakistan's apparel sector a competitive edge. "Instead of simplifying exports, the EFS has become bogged down by manual procedures and is now under threat from proposed tariff changes," said Abdul Hameed. Ayyazuddin stressed that the SMEs, which formed the bulk of the value-added industry, could not survive under such conditions. "We operate on thin margins and short timelines. The EFS was a breakthrough for us, but now it's being reshaped to serve upstream interests. These tariffs, reportedly pushed by the spinners' lobby, protect a narrow segment at the cost of Pakistan's largest job-creating export base." The industry leaders expressed concern over reports of potential imposition of duties on raw material like synthetic yarn, man-made fibre, technical fabric and accessories – none produced locally. "Any tariff on items under HS Chapters 54, 55 and 96 is unacceptable," said Hameed. "These are essential production inputs and taxing them means taxing exports at the very beginning." Speaking virtually, former PRGMEA chairman Ijaz Khokhar said the entire value chain had welcomed the EFS as a much-needed correction in policy. "But distortions are creeping in. The original vision of a seamless, transparent system is being hijacked," he said.
Business Recorder
02-06-2025
- Business
- Business Recorder
Trade barriers and cooling supply chains: Apparel sector warns of setbacks
LAHORE: Seeking an urgent meeting with Prime Minister Shehbaz Sharif ahead of the federal budget, Pakistan's apparel sector; a vital contributor of over $9 billion in export revenue has warned that the country's value-added textile industry faces serious setbacks due to continued tariff barriers and restrictive policies that are choking supply chains. In a joint statement issued by the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) and the Pakistan Hosiery Manufacturers & Exporters Association (PHMA), apparel exporters stressed that global buyers now demand certified, high-performance materials that are simply not available in Pakistan. Yet, import of such essential raw materials remains hindered by duties and outdated regulations. PRGMEA Regional Chairman Dr. Ayyazuddin and PHMA Zonal Chairman Abdul Hameed jointly demanded a direct and an immediate meeting with the prime minister ahead of the budget, warning that without urgent intervention, Pakistan could lose out on the global shift in sourcing patterns that has opened fresh opportunities for new exporters. Dr. Ayyazuddin emphasized that Pakistan still relies heavily on cotton-based exports — primarily denim and fleece — while nearly 80% of global apparel trade has moved toward synthetic and functional textiles. 'We cannot expand or diversify if we don't have access to the right raw materials,' the statement said. 'We are being penalized for importing items that aren't even produced locally.' Abdul Hameed pointed out that man-made fibers, technical yarns, performance fabrics, and critical trims — many categorized under HS Chapters 54, 55, and 96 — are subject to duties despite not being manufactured in the country. 'Keeping tariffs on non-available raw materials is equivalent to taxing exports before they even happen,' he said. Former PRGMEA chairmen Ijaz Khokhar and Sajid Saleem Minhas backing the joint demand highlighted that SMEs are particularly vulnerable due to rigid policies and lack of flexibility in global compliance. 'We've sent a detailed letter to the Prime Minister Shehbaz Sharif and commerce ministry outlining how certain recent policy changes, like the shortening of the Export Facilitation Scheme (EFS) input period from 60 to just 9 months, are unrealistic for the apparel sector,' he said. PRGMEA ex-chairmen Ijaz Khokhar added that the letter, addressed to the PM as well as the Commerce Minister Jam Kamal, strongly criticizes the abrupt shift in EFS timelines. He argued that value-added exporters often operate under just-in-time and never-out-of-stock business models, requiring longer input cycles to fulfil diverse orders. He said that the current restrictions, it warns, will disrupt operations and increase compliance burdens for exporters. Sajid Saleem Minhas added that the local spinning industry has not evolved to meet the requirements of today's global fashion market. Since we don't produce the materials our buyers demand, we should at least allow their duty-free import. Otherwise, we are locking ourselves out of high-growth product categories, he said. The PRGMEA and PHMA members also called for restoration of the Final Tax Regime (FTR) for exporters, stating that the shift to the Normal Tax Regime has led to complex audits and disrupted business continuity. We need simplicity and certainty, not additional paperwork and scrutiny,' the statement noted. Ijaz Khokhar also raised another concern which is the lack of government push on trade diplomacy, particularly with the United States, where Pakistani textiles face an average import tariff of 29%, compared to lower rates for competitors like Bangladesh and Vietnam. The letter suggests Pakistan negotiate preferential terms or targeted tariff relief with the U.S., especially for eco-friendly and sustainable products that align with global ESG compliance. He said that refund delays were also highlighted as a chronic problem. Exporters are facing severe liquidity shortages due to delayed disbursement of DLTL, DDT, sales tax, and withholding tax refunds. The industry has requested an automated and time-bound mechanism for refund processing to ease working capital constraints. Additionally, both associations emphasized the need for a strong national marketing campaign for 'Made in Pakistan' garments. They urged the Ministry of Commerce to initiate global trade outreach through embassies, digital platforms, and targeted B2B events to increase visibility and improve brand image. He said that this sector has the potential to double its exports in five years and added that we need the government to first remove these structural roadblocks. Sajid Minhas said that the Pakistan's value-added textile sector is one of the largest employers and a key contributor to national exports. The country cannot afford to lose this opportunity. We request the prime minister to meet us urgently and help align policy with global market realities. Copyright Business Recorder, 2025
