ISLAMABAD: Pakistan’s industry is now almost at 100 percent capacity and more importantly a process to expand the industrial base has started which is quite visible by increasing imports of machinery. This means that a country that two years ago was in de-industrialization mode is now heading for industrialization, said Abdul Razak Dawood, PM Advisor for Trade and Investment.
The country’s industrial activity curve after momentum after government incentives has reached its highest but will continue to rise after expansion of the existing industrial base. The government has provided Rs100 billion worth of TERF (temporary economic financing facility) to the business community for the import of machinery to achieve sustainable industrialization. And in a welcome development, many industrialists started importing machines under the initiative. With this facility, liquidity for businesses is available at an interest rate of 5 percent. Industrialists can take advantage of the TERF initiative until March 31, 2021, Dawood said.
Adbul Razak Dawood, PM Adviser on Trade and Investment told The News in an exclusive talk here on Wednesday. He said that exports to China after FTA-phase II had jacked up by 30 percent in November despite the negative consequences of COVID-19. And more importantly, services exports also increased 46 percent in five months in the current financial year. Exports to the US, UK and Australia jumped 16 percent each in the first five months and to Korea by 15 percent. Exports to ASEAN and African court members also increased.
However, Dawood said that because of the catastrophic decline in cotton production, Pakistani industrialists had to import five million bales of cotton valued at $ 1.2 billion to fill textile export orders. This year cotton production has alarmingly fallen to 7 million bales from 14 million bales which cannot meet the needs of the textile industry. Now Prime Minister Imran Khan has prepared a special effort to focus on increasing cotton yields at a later time and the government will strive to re-reach the target of 14 million bales of cotton so that the maximum potential of the textile sector can be exploited. He said after the 18th Amendment, the emphasis needed on the agricultural sector was not given. Farming communities are fed up with low quality seeds and pesticides which lead to low productivity. ‘Now the government will increase its efforts to ensure the provision of quality seeds and pesticides to increase yields. “
Dawood said that the diversification of textile exports was gaining momentum due to the massive addition of value. To encourage the added value of textile export products, the government will continue to provide incentives in the form of DLTL (lack of local taxes and levies). However, the facility will not be available for export of gray yarn and fabric. He said the government had cut the import duty for threads by 10 percent to 5 percent by removing the 5 percent regulatory duty. However, the 5 percent import duty on imported yarn will remain.
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