Pakistan losing market share in leather
Briefing Senior Federal Minister of Commerce Makhdoom Amin Fahim, Pakistan Tanners Association (PTA) Chairman Agha Saidain said the leather sector has the potential to double their exports within the next three years to the level of $3 billion from present level of $1.04 billion.
He said India has a growth rate of 22.7% in 2010-12, China achieved so far around 20.7% and Bangladesh’s growth rate in the sector reached 17.5%, but Pakistan is the only country where exports from the leather sector have declined. Pakistan has a negative growth at minus 3.9% during the same period.
The leather sector exports have recorded positive growth at a global level from $80.2 billion in 2001 to $137.96 billion during 2011-2012, Saidain said.
“Unfortunately there is no leather development plan in Pakistan and despite the fact the sector is still a leading producer in South Asia, lack of positive government polices for the sector means that it has been facing inertia over the past six years”, he said.
“The leather sector is one of the most important sectors having wider benefits because of its role in job creation, linkage to agro and rural economies, poverty alleviation and is a good foreign exchange earner.”
The government is deducting 0.25% from all export proceeds as Export Development Fund for development of exports and on the other hand subsidy on participation under country banner in major international exhibitions has been withdrawn after three events.
The duty drawback rates in Pakistan are well below that of India, China, and Bangladesh, he added.
According to the PTA, the Ministry of Commerce (MoC) and Federal Board of Revenue (FBR) should consider the proposed restriction on crust leather export as this was causing a huge loss of $500 million annually to the account of country’s foreign exchange.
Commerce Secretary Munir Qureshi listened to the PTA’s demands for inclusion in the national trade policy 2012-15 and would endorse and recommend to the FBR for the reduction of customs duties on basic chemicals and items to provide a level-playing field for the industry.
There is a mistrust and lack of coordination between the leather industry and the government and for this reason PTA regional units have failed to evolve any short, medium or long-term plan for the development of leather sector, say the PTA.
The PTA would like to give a presentation either in Islamabad, Karachi or Lahore to the Commerce Minister in order to keep him informed with the latest developments and future PTA policies.