Karachi, May 27, 2013 (PPI-OT): The pressing issues being faced by the exporters’ fraternity are to be taken up at the highest level in Islamabad by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in order to save precious foreign exchange earning sector.
On the request of exporters, the FPCCI, which is the apex trade body of the country, arranged a roundtable conference at FPPCI head office under the chairmanship of Vice President Shaheen Ilyas Sarwana the other day exporters unanimously agreed that exports had suffered due to the energy crisis and security conditions in the country.
Following the issues deliberated by the exporters’ representatives, Shaheen Ilyas Sarwana declared that it would be difficult to achieve this year’s export target of $29 billion as only two-thirds or exports worth $19 billion were realised during the first 10 months of the current fiscal year.
Gulzar Firoz the prominent exporter of leather and Vice President FPCCI observed that exporters of second largest value-added sector of exports – leather and leather goods would not survive unless and until permits of exports of livestock are withdrawn. He said that massive smuggling is also continuing on the pretext of export license of livestock.
He suggested that a FPCCI delegation should approach high ups in Islamabad for immediate ban on export of livestock. He also demanded that the government should eliminate two percent withholding tax on exports. He also proposed that commercial councilors’ linkages should be established with local business entrepreneurs at the FPCCI level.
Bilal Mullah representing Pakistan Readymade Garments manufacturers and Exporters Association (PRGMEA) said that garments exporters have lost the golden opportunity to get the orders from Walmart due to the law and order and situation.
He pointed out that Walmart has banned 250 textile manufacturers and the opportunity was knocking on doors of Pakistan’s exporters but the buyer has refused to place orders saying that law and order situation in Pakistan is not satisfactory. He said that utilities charges have also rendered garments sector to compete with the rival countries. He demanded subsidized gas and electricity to value-added sector as given in China and other countries in the region.
Waheed Ahmed, Chairman, All Pakistan Fruit and Vegetable Exporters and Merchant Association, said that there was confusion regarding Iranian trade because banks were refusing to issue Form ‘E’ while State Bank of Pakistan (SBP) denied that there were any such restrictions.
Danish Khan, representing leather garments, discussed problems in exporting jackets using animal fur, saying that bureaucratic hurdles cause foreign exchange losses.
Mehar Alam, Secretary General, FPCCI pointed out that commercial councilors should have a training session at FPCCI to understand the trade and export dynamics.
Shaheen Ilyas Sarwana while presenting recommendations of the apex trade body related to exports. He said that the government should allow export refinance facility (ERF) to the extent of collateral value.
arwana further said that ERF is being provided by financial institutions based on available collateral. “Given the economic downturn, substantial margins are now being withheld on the value of collateral. As a result, the financing limit is well below the collateral value,” he added.
The interest rate of export refinance at 8.4 percent is still the highest in the region, said Sarwana and urged the SBP to lower the rate. “It should be allowed at zero percent to export oriented industries,” he said.
Pakistan export finance guarantee facility is limited to the US and EU countries, he said. “Such schemes should be flexible and extended to other countries, especially non-traditional markets,” Sarwana said.
The SBP is currently allowing 90 days deferred payment for export contracts proceeds. “This should be enhanced to 180 days, as the current limit is too short and causes problems for exporters,” the FPCCI suggested.
Moreover, Firoz said that direct and indirect taxes on exports are almost 40 percent. He said the government should also allow 100 percent exemption on exports or compensate through other measures.
He discussed the issues of stuck up refunds of exporters with the FBR and urged the revenue body to issue refunds on priority basis.
For more information, contact:
Syed Masood Alam Rizvi
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
B-1, Federation House, Main Clifton Road,
Tel: 0092-21-35873691, 93-94
Fax: +9221 3587 4332