LAHORE
The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has urged the government to reconsider its decision to link export rebates with incremental growth in exports, saying exporters should not be penalised for failing to achieve higher year-on-year growth due to domestic and global factors beyond their control.
PHMA North Zone Chairman Abdul Hameed said the export-oriented industry fully supported the government’s objective of increasing exports, but making rebate eligibility conditional on achieving incremental growth could put additional pressure on exporters already facing severe challenges.
He said the rebate mechanism should be designed as a support measure to improve competitiveness rather than a penalty-based system. Exporters, he added, were operating under difficult conditions due to high electricity and gas tariffs, elevated interest and markup rates, rising production costs, liquidity constraints, taxation pressures, delayed refunds and frequent changes in industrial and export policies.
Abdul Hameed said export performance was also being affected by international factors, including weak global demand, intense competition, geopolitical uncertainty, higher freight and logistics costs and changing buying patterns. These factors, he said, were beyond the control of individual exporters, making it unfair to withdraw or recover rebates simply because exports did not exceed the previous year’s level.
He said the government’s performance-based rebate scheme, under which exporters achieving annual growth of up to 10 percent over the preceding year would qualify for a rebate of 1 percent of incremental export value, while those achieving growth above 10 percent would receive a 2 percent rebate, was aimed at encouraging export expansion. However, the policy needed to be reviewed to ensure it did not unintentionally penalise genuine exporters facing difficult market conditions.
He said Pakistan’s export sector urgently needed measures to reduce the cost of production and improve international competitiveness.
The PHMA leader said the government should instead provide a predictable and transparent rebate framework under which eligible exporters could continue receiving basic support, while additional incentives could be offered to those achieving higher export growth.
The government should focus on lowering energy prices, reducing financing costs, ensuring uninterrupted electricity and gas supplies, expediting tax and duty refunds and maintaining consistent policies.
Abdul Hameed pointed out that the value-added textile and apparel industry remained one of Pakistan’s major sources of foreign exchange and employment. However, exporters were facing increasing competition from regional countries offering more competitive energy prices, cheaper financing and stronger industrial support.
He said the industry could substantially increase exports if the government created a level playing field with competing economies. Instead of linking all incentives to incremental export performance, available resources should also be used to reduce structural costs and strengthen production capacity.
The PHMA North Zone chairman welcomed measures to expand export financing facilities and introduce long-term financing for export-oriented projects, saying affordable working capital and investment finance could help industries modernise and expand. However, he stressed that financing support alone would not be sufficient unless the overall cost of doing business was reduced.
He proposed that the rebate system should have two components: a basic rebate available to eligible exporters to offset structural cost disadvantages, and an additional performance incentive for those achieving genuine incremental growth.
Abdul Hameed urged the government to consult exporters and trade associations before finalising the implementation mechanism. He said Pakistan needed a long-term export strategy based on competitiveness, productivity, value addition and market diversification.
He stressed that stagnant exports should not be viewed merely as a failure of exporters, and the government must address the structural factors responsible for weak export growth.
