ISLAMABAD: Textile and clothing exports increased by only 0.93% in FY24, showing that the sector is struggling to compete with regional rivals due to tough tax measures introduced this fiscal year.
High energy costs have also impacted exports, as shown by the 3.91% drop in June’s export figures compared to last year, according to data from the Pakistan Bureau of Statistics (PBS) released on Thursday.
Former commerce minister Gohar Ejaz mentioned that textile and clothing exports have remained stagnant over the last two years despite having a $25 billion capacity. He emphasized that to boost exports, the government needs to provide competitive energy rates, tax breaks, and sales tax refunds.
Taxation’s Impact on Future Performance
Textile and clothing exports rose by 0.93%, reaching $16.55 billion in FY24, up from $16.50 billion the previous year. However, June’s exports fell to $1.41 billion, down 3.91% from $1.47 billion the same month last year. Month-over-month, exports dropped by 9.23%.
The government has introduced several measures, such as raising the tax rate on exporters’ personal income for 2024-25. The effects of these measures will become evident in the upcoming months.
Sector-Specific Performance
PBS data showed a mixed performance across different textile sectors:
- Readymade garments increased by 2.05% in value and 1.99% in quantity.
- Knitwear dropped by 0.66% in value but grew by 41.44% in quantity.
- Bedwear grew by 4.12% in value and 15.27% in quantity.
- Towel exports rose by 5.55% in value and 14% in quantity.
- Cotton cloth exports fell by 7.72% in value but increased by 16.15% in quantity.
The import of textile machinery dropped significantly by 54.52% in FY24, indicating that there were fewer expansion or modernization projects.
Oil Imports
Oil imports decreased by 0.61% in FY24, totaling $16.91 billion compared to $17.01 billion last year. The import of petroleum products fell by 12.91% in value and 7.09% in quantity. However, crude oil imports rose by 15.74% in quantity and 11.80% in value.
Mobile Phones
Mobile phone imports surged by 233.10%, reaching $1.89 billion in FY24 from $570.07 million last year, making it the largest share of overall machinery import value. Other mobile devices also increased by 20.94%, totaling $467.56 million in FY24 from $386.62 million last year.
