Former President of Islamabad Chamber of Commerce and Industry (ICCI) Dr. Shahid Rasheed Butt on Friday said the textile industry is the backbone of the economy which is collapsing under the weight of the non-availability of raw materials, energy prices, and tax issues.
The exchange rate volatility, non-payment of refunds, and load shedding are also hurting this sector, he said.
Shahid Rasheed Butt said that textile is the largest manufacturing sector of the country having an eight percent share in the GDP and a 60 percent share in exports.
Forty percent of urban labour is employed in this sector but now almost half of the factories have been closed due to various issues, he added.
There is a scarcity of cotton for this critical sector as crops on millions of acres have been washed away, he informed.
Some other reasons for the decline include high inflation, high interest rates, soaring energy prices, and load shedding of both electricity and natural gas in industrial areas, he said.
Mr. Butt said that there is a drop in the demand for clothing and textile products in the US, UK, and Europe amid inflation, energy expenditure, and credit cost and buyers are delaying payments because of the global downturn and reduction in sales due to which exporters are facing a liquidity crisis.
The business leader said that textile exports are down by 16.3 percent as compared to the last year and it will slide further if the issues of this important sector were not resolved on priority.
The government is holding back refunds to the tune of Rs345 billion resulting in a liquidity crunch while sales tax refunds worth 55 billion rupees are also stuck in the FBR for six months.
The textile millers say that the export industry cannot survive in presence of 17 percent GST on textile exports therefore their demands should be considered seriously.
