Business community worried over burgeoning trade deficit
LAHORE: Pakistan’s business community has expressed concern over the burgeoning trade deficit and asked the government to take stakeholders into confidence and eradicate unnecessary hurdles hindering exports and the domestic industry.
They said Pakistan’s largest export revenue generator – the textile sector – was the key to making a difference.
“Quarterly trade statistics suggest that the country’s trade deficit is likely to widen in coming months, so the government should immediately announce a textile package as delay has already hit textile exports,” said Lahore Chamber of Commerce and Industry’s former president Mian Anjum Nisar.
Tax issues
He said the textile sector was facing the worst possible scenario as the largest export industry after gaining the GSP Plus status in 2014 had been continuously declining due to uneven policies, higher cost of doing business and different tax issues.
He said the sector was considered the backbone of the country and the largest manufacturing sector, but it had failed to reap benefits of the GSP Plus. On the other hand, Bangladesh managed to push its exports to $31.2 billion in 2014-15, of which textile sector accounted for almost $25 billion.
“Pakistan’s largest export sector, after touching $13.8 billion worth of exports in 2013-14, dropped to $12.14 billion in 2015-16, which is alarming,” Nisar said.
Pakistan’s trade deficit widened 8.14 per cent to $23.96 billion in 2015-16 compared to previous year’s $22.16 billion.
Even in the first three months of the current fiscal year, the deficit widened to $9.31 billion, whereas exports fell 6.31 per cent to $6.4 billion. On the other hand, imports swelled 8.51 per cent.
However, Pakistan Industrial and Traders Association Front Senior Vice Chairman Tanvir Ahmad Sufi said imports were saving the local industry and the government should further lower duties on important raw materials.
“National economy is being saved by the local industry and the government should lower tariffs on those imported raw materials which are not available in Pakistan,” said Sufi.
“Government is not realising the impact of CPEC on the local industry,” he said, adding before the trade started in full swing, the government should make concrete steps for saving the local industry as it was not possible for China’s exports to not make inroads into Pakistan.