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Ministry of Textile Industry, Government of Pakistan PRESENTATION ON “INVESTMENT IN TEXTILES AND GARMENTS INDUSTRY TO BOOST EXPORTS” Ministry of Textile Industry, Government of Pakistan

Scheme of Presentation Textiles Sector Overview European Union-Generalized Systems of Preference Plus (GSP+) Scheme Textiles Policy 2014-19 3

Importance of Textiles Sector Contribution to National Economy Percent (%) Share in GDP 8 Share in industrial value added 23 Share in total exports 56 Share in industrial employment 40 Share in banking credit (manufacturing) 36 4

International standing of Pakistani Textiles Production and Export Percent (%) Rank Cotton Production 9.5 4th Cotton Consumption 10.0 3rd Yarn Production 9.0 Yarn Export 26.0 2nd Cloth Production 7.0 Cloth Export 14.0 Garment Export 1.0 20th Total Textiles Export 2.0 15th 5

Textiles Exports $ Billion 6

Pakistan’s Textile Exports Rank in World Country Share in World Pakistan's Share 1 USA 17.04% 2.95% 2 Germany 7.92% 1.73% 3 Japan 6.57% 0.30% 4 China 6.47% 5.13% 5 United Kingdom 4.94% 3.25% 6 France 4.45% 1.87% 7 China, Hong Kong SAR 4.08% 1.00% 8 Italy 3.92% 1.39% 9 Spain 2.75% 2.31% 10 Netherlands 2.15% 1.62% 11 Russian Federation 2.13% 1.22% 12 Canada 2.11% 1.47% 13 Belgium 1.93% 2.35% 14 Rep. of Korea 1.34% 15 Turkey 1.80% 2.58% 7

Global Export Dynamics Trade Mix of Pakistan Global Trade Mix 8

Untapped potential of textiles and garments vis-à-vis competing countries $ Million Sr. No. Country  Textiles Garments Total % Share of Garments 1 China    111,662    186,607    298,269 62 2 India      18,340      17,742      36,082 49 3 Turkey      12,522      16,680      29,202 57 4 Bangladesh         2,361      24,584      26,945 91 5 Vietnam         4,786      19,544      24,330 80 6 Pakistan         9,077         4,991      14,068 33 9

Trend of Garment Exports in Pakistan US$. (Million) FY Textiles Garments Total % Share of Garments 2010-11 9,809 4,078 13,887 29 2011-12 8,857 3,608 12,465 28 2012-13 9,192 3,841 13,033 2013-14 9,518 4,202 13,720 30 2014-15 8,959 4,517 13,476 33 10

GSP+ Scheme Duration of the Scheme: GSP+ Coverage: Annex IX of the EU Regulation 978/12 includes complete textiles and clothing value chain i.e. Harmonized commodity description and coding System (HS) chapters 50 to 60 under Section 11a and chapters 61 to 63 under Section 11b” Duration of the Scheme: The scheme shall apply until 31st December 2023 (Article 43-3) Rules of Origin: To benefit from the tariff preferences, the products for which the tariff preferences are claimed shall originate in a beneficiary country 11

Textiles Policy 2014-19

Textiles Policy 2014-19 Vision To become a leading value-added textiles export country Mission To develop and implement a textiles policy which ensures consistency, predictability and transparency in Government actions and programmes, while building the reputation of Pakistan as a reliable source of high quality goods. 13

Contd.. Technology Up-gradation Fund (TUF) Support Scheme: Technology Up-gradation Fund including SMEs will be extended for this Policy period as well Drawback of Local Taxes Draw-back for local taxes and levies to exporters of textile products on FOB values of their enhanced exports on an incremental basis if increased beyond 10% over previous year @ Garments 4%, Made ups 2%; and Processed fabric 1% Tariff on Machinery Imports SRO 809 for duty free import of machinery has been extended till 2016 Long Term Financing Facility (LTFF) and Export Finance Scheme (EFS) The Government has reduced interest rates of LTFF and EFS to 5% and 3.5% respectively 14

Contd.. Joint Venture Comprehensive plan in consultation with BOI and trade association will be formulated to facilitate joint ventures Strengthening of textile firms Initiatives will be taken to strengthen the strategic and competitive capacities of textiles value chain and allied firms Under performing units will be supported through management capacity building, BDS support, facilitating mergers and any other viable options Electricity and Gas The government will take measures to give priority to textile sector for availability of energy to fully utilize the GSP+ status. For this purpose, a joint committee of Ministries of Textile Industry, Petroleum & Natural Resources, Water & Power and Finance Division has been constituted to work out solutions Associations will be facilitated to carry out energy audits 15

Contd.. Technical Textiles Technical textile is an emerging area, the Government will develop a proper strategy and exclusive centre in fields of geo-tech, meditech and sportech will be established KOICA has shown interest in establishing a technical textile center in National Textile University, Faisalabad of around $6million 16

Contd.. Allied Industry Establishment of Textile machinery manufacturing, textiles dyes and chemicals and accessories would be facilitated Viability studies for these sectors would be initiated and in light of these studies measures would be introduced 17

Garment Cities in Lahore, Faisalabad and Karachi 18

Thank You Contact Information: Contact Person: Federal Secretary, Ministry of Textile Industry Address: Ministry of Textile Industry, First Floor, Evacuee Trust Complex, Agha Khan Road, Sector F-5/1, Near Marriott Hotel, Islamabad, Pakistan www.textile.gov.pk www.rdacell.com Phone: +92-51-9203346 & 49 Fax: +92-51-9203345