Pakistan: GSP+ status helps solid textile and garment exports growth

Textile and apparel exports increased in Pakistan by 5.3 percent to 13.7 billion US

dollars for the fiscal year that ended on June 30, 2014, up from 13.06 billion US dollars in the previous fiscal year according to data released by the Pakistan Bureau of Statistics last week.

By segment, knitwear exports increased by 10.5 percent and ready-made garments by 8.7 percents. Cotton yarn exports gained by 11.65 percent; raw cotton exports by 33.3 percent and carded or combed cotton exports even by 53.3 percent.

Textile minister Abbas Khan Afridi linked the overall growth of the textile and garment sector in 2014 to an 18 percent surge in exports to EU countries that was fuelled by Pakistan’s new GSP+ status. The Generalised Scheme of Preferences had been extended to Pakistan in December and came into effect from 1st January 2014 to boost Pakistan’s textile and garment exports, which had been declining due to competition from countries like Sri Lanka and Bangladesh that already profit from exemptions from import duties in the EU. The current GSP+ status will grant Pakistan toll free access to 27 European markets until 2017.

Compared to June 2013, textile and garment exports fell in June 2014 by 1,5 percent; a fact that Afridi blames on frequent electricity shortages, especially in the state of Punjab where textile and garment factories were forced to operate only two shifts instead of three due to the power outages. Pre-monsoon, June is normally one of the hottest months of the year, aided this year by a late monsoon onset, which led to capacity overloads.

To tackle the energy problem, a special committee under the directive of prime minister Nawaz Sharif has been set up, comprising of ministers for water and power, petroleum, commerce and the textile industry. No meeting has been held yet.