Pakistan’s hosiery and knitwear exporters are losing their competitive edge in world markets as production costs climb, tax refunds get stuck and compliance expenses mount, the industry’s main body has warned.
In a letter to the federal secretary commerce, Pakistan Hosiery Manufacturers and Exporters Association (PHMA) Central Chairman Zia Alamdar Hussain said the sector was facing a historic rise in production costs that was pricing Pakistani goods out of key markets.
What Is Squeezing Exporters: Pakistan hosiery exports
Hussain listed a series of pressures weighing on the industry. Sea freight to major markets has risen 1.5 to 2.5 times, while exporters are also coping with load-shedding, high energy tariffs, heavy taxation and growing regulatory expenses.
Liquidity has emerged as another serious problem, with delays in tax refunds tying up working capital that exporters need to fulfil orders. Regional competitors, meanwhile, continue to undercut Pakistani exporters on price, and weak global demand has left little room to pass higher costs on to buyers.
What PHMA Is Asking For
The association has urged the Ministry of Commerce to convene a consultative meeting with the Finance Ministry, the State Bank of Pakistan, the Federal Board of Revenue and other relevant institutions to review the problems and work out practical solutions.
As immediate relief, PHMA has proposed a temporary Duty Drawback on Local Taxes and Levies (DLTL) of 6 to 8 per cent of the FOB value for a limited period, to help exporters stay competitive while structural issues are addressed.
Why It Matters
Hosiery and knitwear are among Pakistan’s most labour-intensive export industries, supporting hundreds of thousands of jobs. A sustained loss of competitiveness in the sector would hit export earnings and employment alike, making the industry’s plea one the government can ill afford to ignore.
Frequently Asked Questions
What is PHMA?
The Pakistan Hosiery Manufacturers and Exporters Association represents the country’s hosiery and knitwear exporters, one of Pakistan’s major labour-intensive export industries.
What problems did the industry flag?
Rising production costs, sea freight up 1.5 to 2.5 times, load-shedding with high energy tariffs, heavy taxes, delayed tax refunds hurting liquidity, tougher regional competition and weak global demand.
What is DLTL?
Duty Drawback on Local Taxes and Levies (DLTL) is a support mechanism that refunds exporters for local taxes and levies built into their costs, helping them compete on price in world markets.
What relief is PHMA seeking?
A temporary DLTL of 6 to 8 per cent of the FOB value for a limited period, plus a consultative meeting with the commerce, finance, SBP and FBR officials to find practical solutions.
What happens next?
The ball is now in the government’s court. Exporters are waiting to see whether the commerce ministry convenes the proposed meeting and offers interim relief.
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Originally reported by tribune.com.pk.
