ISLAMABAD: Pakistan can increase the exports of leather garments manifold by utilising modern technology, imparting skills to the workforce, reducing customs duty and tariffs, improving the supply chain and providing energy to the industry.
Muhammad Iqbal, Secretary General of Pakistan Leather Garments Manufacturers and Export Association, told WealthPK that the leather garments sector had the potential to grow but it needed the government’s attention. He said that the government should chalk out effective policies to support exporters. He added that foreign investment in the industry would help to increase the exports of leather garments.
He said that the exports of leather garments could be increased manifold if the government devised specific policies for the leather sector on the pattern of the strategy chalked out for the textile sector to boost its exports.
Muhammad Iqbal said that exporters were burdened with high customs duties and tariffs on the import of raw materials. He said that reducing customs duties and tariffs and giving concessions to the industrialists on the consumption of electricity and gas would boost the leather industry. “India is our biggest competitor in leather exports. If the government doesn’t support the leather industry, it will be difficult for exporters to compete with Indian industrialists,” he added.
He feared that the leather industry would be badly affected by the shortage of gas. He said that the demand for energy was being fulfilled by burning wood, which would result in an increase in input costs. “Due to this, the prices of the final product will increase. It will subsequently decrease demand for the products and manufacturers’ profit,” he said.
Muhammad Iqbal said that many tanning units were closed and thousands of workers lost their jobs because of a shortage of gas. He said that there should be no tariff on the import and export of samples. He added that a reduction in customs duties would help exporters to increase the exports of leather garments.
He also stressed the need to impart training to labourers and introduce them to the latest technologies, including 3D and digital fabrication, which were used worldwide.
The latest report published by the Trade Development Authority of Pakistan shows that the customs duty on the import of chemicals is 20% to 26%. It added that the government must focus on attracting more foreign direct investment to the leather sector besides reducing tariffs and taxes for exporters.
The report pointed out that the duty and tax remission for exports (DTRE) scheme could reduce the downstream costs of leather exports in Pakistan. It said that Pakistan could increase its exports of leather to $2 billion if the government increased the rebate by up to 10% as well as addressed structural problems.
According to the Pakistan Business Council (PBC), leather garment exports from the country were mainly concentrated in the European region, with a combined market share of around 80%. The second largest region for Pakistan’s leather garments is the US, followed by Asia. Germany, France, Italy, the UK, the Netherlands, Spain, Switzerland, Russia, and China are among the top 10 destinations for Pakistani leather garments.
“Pakistan has the untapped potential of over $52 million for exporting leather garments to the US only. Other top potential markets include China and European countries, which can be penetrated through better marketing and participation in trade fairs and exhibitions,” said the report available with WealthPK.
