The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has written a six-point letter to the Ministry of Commerce, pleading for immediate action to save the carpet industry from suffering due to a lack of trade incentives and economic contraction caused by the pandemic.
In the letter, PCMEA Senior Vice Chairman Riaz Ahmad stated that at least 50% compensation subsidy should be given by the government against high air and sea freight rates. He sought participation in international exhibitions with association contribution and government subsidy at a ratio of 50:50 instead of the 80:20 ratio which was approved by the ministry, but had not been implemented to date.
He asked for waiving import duties on unfinished carpets coming from Torkham border as partial manufacturing was done in Afghanistan due to availability of different knots in the country.
In the letter, the carpet manufacturers’ body demanded special incentives due to global recession and the pandemic.
The issue of tax refund claims was also highlighted. The PCMEA senior vice chairman urged officials to release payments against all pending claims of duty drawback, especially the claims under the Drawback of Local Taxes and Levies (DLTL) scheme, which the exporters had filed.
“Pakistan’s carpet industry has been losing its share in the global market over the last few years, mainly due to lack of government support,” Ahmad said, adding that the export value of Pakistan’s handmade carpets had declined significantly over the last more than a decade, shrinking from $278 million in 2005-06 to $67.7 million in 2019-20.
He added that around 70% of the workforce in the country’s carpet industry comprised women, who made carpets at home. “Often these traditional workers lack proper training and the industry requires financing to complete the supply chain.”
“Hundreds of carpet manufacturers have lost their business in the country and workers have lost their jobs since the global financial recession and Covid-19,” he said.
“Meanwhile, other issues like absence of handmade carpets in the free trade agreement (FTA) concession list, insufficient promotion in trade fairs and exhibitions, and delay in release of refunds, concessions and credit financing are also restraining recovery of the carpet industry,” he added.
The association’s office-bearer claimed that the organisation had sought assistance from various ministries, but that no action had been taken.