Carpet makers seek cut in customs duties

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ISLAMABAD: The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has called for reduction in customs duties as the levies are “adversely impacting the sector’s ability to survive”.

A PCMEA delegation, led by Abdul Malik, presented the demands at a meeting with Commerce Minister Jam Kamal Khan on Thursday, according to a press release.

The delegation apprised the minister about the hurdles the industry faces and called for prompt government action for resolution of their problems.

In the first four months of the current fiscal year (July to October), carpet exports dipped by 11.49 per cent to $18.91 million, from $21.36m over the same period last year.

Exports dropped to $19m year-on-year in July-October FY25

In FY24, carpet exports fell to $59.42m from $72.77m over the previous year — a decline of 18.35pc. The commerce ministry has not yet addressed the sector’s grievances despite the fact that carpet exports have been declining for the last several years, the association said.

An official announcement of the commerce ministry said the delegation explained the complex process of carpet production in the country.

First, raw materials are sent to Afghanistan, raw or unfinished carpets return to Pakistan from there for final processing before being exported globally.

Even though 99 per cent of these carpets are exported, the traders are unable to avail the benefit of customs duty exemptions from the Federal Board of Revenue (FBR), leaving them without vital incentives for exports.

Representative of the industry emphasised that customs duties at the border with Afghanistan had forced many small and medium-sized enterprises (SMEs) to shut down.

“To save this sector and ensure its growth, it is essential to make semi-finished carpets duty-free,” Abdul Malik said, adding that the government’s support is crucial for survival of the industry.

Commerce Minister Jam Kamal assured the PCMEA of his full support, recognising the sector’s potential as a foreign exchange earner.

He stressed the importance of promoting “Made in Pakistan” products and addressing intellectual property issues, such as patent protection for Pakistani carpets, to improve global recognition.

The minister proposed convening of a meeting with the FBR and other stakeholders to explore solutions and to address the sector’s concerns.

Mr Kamal assured the delegation that the government would take measures to protect the carpet industry and help SMEs flourish.

The PCMEA delegation expressed hopes that the government’s “timely intervention” would provide relief to manufacturers and help the sector regain its competitive edge in international market.

Published in Dawn, November 29th, 2024

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