Bangladesh, China, and India, Pakistan's main competitors in textile export, offer compensation as well as incentives to their textile sector where cost of production is much lower than Pakistan but in our case, the Government has not taken any concrete steps to reduce production cost of export. China and India have given different packages and incentives to their textile industry to make them competitive by bringing down their cost of production", said Abdullah Zaki Senior Vice President of KCCI during the first meeting of the Chamber's export sub-committee.

The SVP also spoke about the frequent increases in the rates of power and gas, the low availability of water, and power breakdowns in the systems.

Alamgir A. Shaikh, Chairman of the Sub-Committee informed the house that this year it has been made sure that almost all the sectors of exports be given membership of the committee so that their maximum participation in the activities of the Sub-Committee could become possible.

Alamgir Shaikh while giving the figures of exports during the first five months of the current fiscal year (July-November) 2006, the chairman said that export during this period stood at $6.9 billion as against US$6.5 billion of the same period of the corresponding year. He also elaborated and highlighted a number of issues and problems being confronted by export sector. He said that world market has transformed from sellers market to buyers market and for the survival, prompt delivery, best quality, and competitive price are the pre-requisite.

"Government in a bid to motivate and to provide cushioning edge to exporters in this era of fierce competition, when textile exports in particular and aggregate exports in general are facing a very tough time, should exempt import of raw materials for all industries from all sorts of customs duty, sales tax withholding income tax etc and gas and power rates must also be brought down in a bid to reduce the escalating cost of doing business", he added.

He also shed light on the high cost of production in Pakistan vis-a-vis much lower cost of doing businesses in China, Bangladesh and India, who are the main competitor of Pakistan.

The power tariff in China and India countries is much lower than power tariff prevalent in Pakistan. India has taken certain measures to curtail cost of production of Apparel industry; concessions have been given to existing Industrial Areas. It is high time government of Pakistan took concrete and pragmatic measures to safeguard the exports particularly the textile sector, which is facing very hard time the chair said.

The chair also said that foreign exchange is just like blood for the economy and more than 60 per cent of foreign exchange is earned from the textile sector, which is at the moment exposed to severe challenges and problems.

While commenting on export refinance rate he said that the rate of export finance is still too much for exporters and State Bank of Pakistan should bring it down at least to 4 per cent so that exporters maintain their survivability and do not become the sick industries. Commenting on Role of Pakistani missions abroad he said that proper liaison with commercial sections of Pakistani missions should be the foremost strategy of Ministry of Commerce as well as Trade Development Authority of Pakistan (TDAP).Each Commercial Attaches be given a target figure so that they gear up their performances to facilitate Pakistani exports to their designated countries.

During the meeting a number of issues and roadblocks to exports were discussed such as stuck up Research and Development (R&D) claims with State Bank of Pakistan, rising electric and gas rates. It was also widely pointed out by the Committee that government needs to focus on reducing the cost of doing business, which will obviously come down only if energy charges, transportation cost, port handling etc are reduced. Issue of EOBI and Social security was also highlighted by the members and it was observed that it should be kept in abeyance for 2 years.

The Committee, inter-alia, also discussed issues of export diversification, encouragement to small and medium-sized exporters, proper role of Pakistani missions abroad to accelerate the aggregate export performance of the country.

During the meeting members expressed their grave concern over the multiplication of problems confronted to exports sector. The meeting inter-alia also considered and discussed the issue of closing of Customs and Port during strike days and Sundays, besides discussing the problem being faced by exporters due the rules of State Bank of Pakistan regarding issue of two Bills of Lading.

Saqib Naseem Vice President invited all the members to send their suggestion product-wise to the sub-committee within a stipulated time so that a working on the same could be prepared highlighting the problems and issues of export sector for sending the same to Ministry of Commerce for their consideration and possible solutions to pull out the exports of the country from the deep quagmire of challenges and hardships.

He also informed the house that Officials of State Bank of Pakistan dealing with the clearance of R&D stuck up claims would also be invited to KCCI to discuss the issue of pending R&D claims.