Tuesday, March 10, 2015 – Lahore—Pakistan Carpet Manufacturers and Exporters Association, in a letter written to Federal Minister of Commerce, criticized the decision of Turkish Ministry of Economy to impose 50% custom duty on Pakistani carpets.

“Turkey, the second largest importer of Pakistani handmade carpets, has imposed 50% percent custom duty on 130 Pakistani products including hand knotted carpet, leading to further decline in the already squeezed carpet export of about 128 million US dollars.”

PCMEA Chairman, Usman Ghani and vice chairman, Mr. Qamar Zia, in the letter, said that after the announcement of this additional 50% customs duty, the foreign buyers have stopped purchasing orders from Pakistani importers. As a result, all shipments at Karachi, waiting for custom clearance, are being sent back to Punjab, which contributes almost 80% of carpetmanufacturing presently. A number of honorable PCMEA members from Karachi as well as Lahore have complained that their orders have been cancelled by the foreign importers after the announcement of additional custom duty by Turkish government.

MR. Usman Ghani blasted the unfriendly decision of Turkish government, which we here in Pakistan consider our friend, started the unfriendly move of enhancing tax at a time when Turkish Prime Minister was on visit to Pakistan. Their move will totally destroy our carpet industry. He said that carpet exports have registered another decline of more than 10% during first half of the current fiscal year of 2014-15 despite free market access to the EU countries under GSP Plus status with the country already suffering decline of over 50% during the last seven years to 128 million dollar from 300 milliondollars.

The Pakistan Carpet Manufacturers and Exporters Association demanded that government of Pakistan should immediately take up this issue with the Turkish government to get the duty withdrawn. The FTA should be signed with Turkey and hand-knotted carpets must be a part of FTA for duty-free access to Turkish market. The government should take immediate steps as quite a lot of orders shipments are getting ready and also stopped at Karachi port.

PCMEA vice chairman, Mr. Qamar Zia observed that the government needs to incorporate hand knotted carpets in FTAs with other countries, as the handmade carpets have never been included in any Pakistan’s Free Trade Agreement. The PCMEA vice chairman observed that almost 100% of carpets produced in Pakistan are exported, providing around 600% value addition to our products. He said that the sector of handmade carpets is labor-intensive and the majority of women employed in it work from their homes.

The exports of hand knotted carpets are based upon the most scattered and unorganized manufacturing sector in the country, which constitutes the largest cottage industry in Pakistan. This 100% exportable product creates at least 600% value addition and provides livelihood to more than one million people in remote areas. The hand knotted carpet sector represents small Industry locating in the remotest and most poverty stricken areas of Pakistan.

News Source: Pakistan Observer