Pakistan’s textile industry is still reeling from rising costs and some mills have even closed up shop in the face of what has become a nonviable business—but workers haven’t conceded defeat yet.
As many as 10 million textile workers are set to fill the streets of Pakistan in a countrywide strike August 7 in protest against the state of the sector.
Member mills are struggling in the face of high costs, what they consider to be unjustified burdening of the industry in the form of electricity surcharges—which can be upwards of 45 percent more than the country’s regional competitors pay—enforcement of a gas infrastructure development tax and punitive taxation on export-oriented goods.
In June, the country’s National Electric Power Regulatory Authority’s (NEPRA) announced a 1.86 rupee ($0.02) reduction per kWh to the electricity tariff, but the government’s imposed surcharge of 3.60 rupees ($0.04) per unit lessens any beneficial impact of the recent reduction.
The surcharges and fees have left the majority of mills suffering losses and many are on the brink of closure.
APTMA chairman S.M. Tanveer said in the last six years, 35 percent of Pakistan’s production capacity has been impaired and a stagnant investment scenario is prevailing, Pakistan’s Business Recorder reported.
Now, APTMA is seeking a 7-point agenda it feels will help set the sector straight: zero duty on exports, a regionally competitive electricity tariff, withdrawal of the gas infrastructure tax and proposed increase in gas tariff, an export refinance facility for the entire textile value chain, extension of a long-term finance scheme from spinning onwards, strengthening of domestic commerce by introducing measures for countering informal trade and dumped imports, and a 5 percent export incentive to capture non-traditional markets.
All of the country’s leading textile agencies, including the Pakistan Textile Exporters Association (PTEA), All Pakistan Power-looms Association (APA) and the All Pakistan Sizing Industry Association (APSIA) are supporting the All Pakistan Textile Mills Association (APTMA) in the protest.
Sector stakeholders are urging APTMA to call on the prime minister, chief minister and federal finance minister to take action to revive the textile sector, and the workers and their representative associations have promised to continue the strike indefinitely if the industry’s viability issues aren’t resolved.