Flight of textile sector from the country powered on incentive offering neighbours
15 Feb '06
2 min read
Sops in tangible and intangible forms like subsidiaries, low interest loans and others offered to textile sector by neighbouring countries, China, India and Bangladesh, has adversily affected Pakistan's share of international apparel and clothing markets.
Bangladesh is fast threatening to overtake Pakistan by rapid progress on the textile front through its achievements over the years.
The country has set up over 4.5 million spindles, about 50 percent that of Pakistan, and is producing almost all the raw materials itself.
China also offers several incentives but a more tangible one would be an unrealistic exchange rate triggering huge capital formation in the textile sector.
India's Technology Upgradation Fund Scheme (TUFS) is successful in enhancing the textile sector.
This scheme provides five percent compensation on the interest rate by the identified financial institutions on sanctioned projects and also incorporates a credit link subsidy at the rate of 10 percent
The total amount of support comes up to around Rs25000 crore apart from the Rs9000 crore dispersed by the government up to October 2005.
Technology Mission on Cotton, adoption of the Bt Cotton Technology, a scheme of integrated textile parks, rationalization of duty structure, concessionary duty on import of specified textiles and garment machinery are all providing necessary fillip to the Indian textile industry in the post-quota regime.
National Institute for Fashion Technology and facilities such as eco-testing laboratories too have played a major role in development of the industry, sources said.
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