TC Jan-Feb 2021 Issue

TRADE CHRONICLE
innovation, and value addition,
adjusting according to each
other’s market demands, experts
urge.
The visit has also helped alleviate
Muslims’ sentiments about the
funeral of the dead bodies who
died due to COVID-19 in Sri
Lanka. Prime Minister Imran Khan
reportedly spoke to the Sri Lankan
leadership on the matter and urged
them to respect the Muslims’
sentiments.
We happily note here that it
was primarily due to the prime
minister’s persuasion that the Sri
Lankan government decided to lift
the ban and allow Muslims to fulfil
their religious rituals. The news
has made international headlines.
Mr Khan deserves praise for taking
this initiative and resolving an
issue deeply troubling the Muslims
in another country.
A leading paper has rightly
pointed out that what must have
helped the Sri Lankan government
reverse its order was that the
prime minister had a successful
tour of the country and generated
significant goodwill. It is also safe
to assume that Sri Lanka would be
happy to have Pakistan on its side
on various issues and especially
those that figure in international
forums. Both Islamabad and
Colombo deserve credit for
resolving the matter amicably and
making it a win-win for all.
It is foreign policy wins like these
that add gravitas to governance
and improve relations between
countries. The prime minister has
done well, and Sri Lanka’s Muslims
are better off and relieved due to
his initiative.
Editorial Comments
The new five-year textile policy, need of the hour
Pakistan’s total export in January
2021 stood at US$2.145 bn as
compared to US$2.366 bn in
December 2020, down 9.33% MoM,
while up 8.79% YoY basis. The total
cumulative exports in 7 Months of
FY-21 reached US$14.255 bn (up
5.62% YoY). Out of these exports,
the overseas textile shipments
declined for the first time since
November, clocking in at US$1.323
bn in January – down 5.54% mom
(while up 10.79% YoY). However,
on an encouraging note, Pakistan’s
textile exports outperformed both
India and Bangladesh. Total textile
exports in 7 Months thus reached
US$ 8.766 bn (up 8.23% YoY) from
US$ 8.1bn in the same period of
last year.
Experts’ view that the decrease in
exports is seemingly due to the
seasonal trend, where exports
tend to be slow in January and
February before picking up
again for the spring and summer
seasons. However, textile exports
remain steady despite the
prolonged lockdowns in the major
exports destinations (Europe and
the US).
The above export trend illustrates
that the textile sector has not
only withstood pressures from
the Covid-19 but has grown
exports faster than before the
pandemic, where the exports have
averaged at US$1.3bn (excluding
August 2020, which was a oneoff
due to the monsoon rain and
an unusual number of holidays).
Experts believe that the sector
is likely to demonstrate similar
future growth, thanks partly to
government incentives (including
the upcoming Textile Policy
that is pending approval) and
global trends favouring Pakistani
exporters.
Keeping in view the 60 % share
of textile in the country’s exports,
we trust that the government
would soon approve the new fiveyear
textile policy, which likely
improves the sector’s long-term
competitiveness and creates
new investment and employment
opportunities in the country.
All Pakistan Textile Mills
Association (APTMA) urges the
government to approve a new
textile policy for new investment,
creating four million jobs and
sustainable export-led growth.
Another stakeholder of the textile
industry, Pakistan Readymade
Garments Manufacturers &
Exporters Association (PRGMEA),
called for the final approval of
the new textile policy 2020-25
by the Economic Coordination
Committee (ECC) of the Cabinet as
it is vital for new investment and
marketing plan in the significant
export-oriented sector.
According to APTMA, the textile
sector has started growing after
seven long years. It is currently
operating at full capacity, the
largest ever increase in exports
to $2.366 billion in December
2020. Over $3 billion investment
in new projects and expansion
are in the pipeline. It is hoped that
Rs. Fifty billion Financing Policy
for Acquisition of Sick units by
SBP can add $1 billion in exports
immediately.
APTMA has projected that the new
textile policy would double textile
exports from $13 billion to $26
billion in the policy period. Hence,
they demanded that as per the new
policy, the textile sector is ensured
the continuation of a regionally
competitive energy Tariff of 7.5
cents/kWh for Electricity and $6.5/
MMBTU for RLNG/Gas fixed for the
policy period.
It is strange that even after the
go-ahead given by Prime Minister
Imran Khan twice, the approval
of Textile Policy 2020-25 is still
awaited. Experts feared the
competing countries like India
are formulating long-term policies
to cushion the declining textile
TRADE CHRONICLE - Jan - Feb - 2021 - Page # 7