Daily Times

KARACHI: Multiple factors are affecting export of Pakistani leather and leather products to various countries, people associated with the business told Daily Times on Thursday.

Pakistan Tanners Association (PTA) representatives said that a decline in exports of leather and allied products from July 2015 to June 2016 was alarming. Leather exports declined by 26 per cent, leather apparel and clothing exports by 12.4 per cent, leather gloves exports by 11.45 per cent, leather footwear exports by 18.80 per cent and exports of other leather products by 6.25 per cent during the aforementioned period. The average decline in the exports of leather products stands at 18 per cent, according to the PTA representatives.

Agha Saiddain, an expert on leather technology and a senior member of the PTA, said that people associated with the leather business had informed the government and the Commerce Ministry about this situation. He said that businesses associated with leather exports were in need of urgent help.

He said that duty drawback rates should be re-notified as recommended by the Input Output Coefficient Organisation. He said the Federal Board of Revenue abolished this facility without taking the sector into confidence. He said the duty drawback rate in the competing countries was 8 to 10 times higher than the duty drawback rate in Pakistan.

Saiddain said that customs duty on import of raw hides and skin should be lowered to three per cent and the government should allow zero rating of taxes on exports in the form of Drawback of Local Taxes and Levies (DLTL) at five per cent to be reimbursed through banks on realisation of export proceeds.

He said that leather and leather-based industries had been contributing Rs 20 billion to the national economy and they directly employed more than 250,000 workers with an export income of more than $ 650 million per year. This means the businesses associated with leather exports make four per cent of the Gross Domestic Product and the leather sector is the third biggest exporter of the country.

PTA chief Gulzar Firoz said the authorities should extend and notify schemes for assistance/reimbursement of 75 per cent cost for mandatory certifications/laboratory testing from internationally accepted laboratories on the pattern announced in the Trade Policy 2005-2006. He asked the government to continue the facility of matching grant for setting up Effluent Treatment Plants (ETPs) at individual tanneries for PTA members who had set up new tanneries. He asked the government to extend the incentive of 25 per cent cost sharing for those setting up laboratories at individual tanneries, for PTA tanners as well as newly-established units. He said the leather industry was facing difficulties due to the changes taking place globally. It is not only competing with the underdeveloped or developing countries; it has to compete with the developed world, he said. Technical improvements, market research, adoption of new techniques and improvements in designing are a must now, he said. He said that different units in the leather sector would have to be more efficient now.