KARACHI, Jan 22: Leather garment manufacturers and exporters have urged the government to announce a package for revival of industry which ran into crisis after recording a fall of up to 47 per cent in December last.

This is the largest fall in value-added products’ exports which indicates that some serious problem is confronting leather garment exports, they said, adding exports increased till October 2008, but from November there had been a consistent fall in leather garment exports because of global recession.

As a result of this development, many leather garment manufacturing facilities are threatened with closure.

Fawad Ijaz Khan, chairman, Pakistan Leather Garment Manufacturers and Exporters Association (Plgmea), has urged policy-makers to come up with some solution to save the labour intensive industry from a total collapse as it earns precious foreign exchange also.

Mr Fawad stated that a major portion of the decline is due to the return of foreign buyers to China and India. Since December 2008, the Chinese and Indian governments, he said, have offered incentives to their exporters to lower their costs in the present crisis and attract foreign buyers.

Appreciating the government decision to give package to textile sector, he said that leather garments sector should also be given incentives on these lines.

Textile garments and leather garment sectors generally face similar nature of problems, he added.

He further stated that leather garments industry has potential to gain greater share of world market, if a level-playing field and needed support is ensured.

Despite the fact that Plgmea had made several proposals in the past for boosting export of leather garments, so far no major steps have been taken by the government, he maintained.

The short-term proposals made by Plgmea include that the government should bear the cost of markup of up to 180 days on issuance of L/Cs of leather garments and leather goods exporters while opening L/Cs of raw material.

The markup rate of export refinance should be reduced to three per cent for at least two years for leather garments and leather goods industry.

Furthermore, he said, the State Bank should also allow deferment of markup on export refinance during 2008 for one year. The SBP had previously allowed this facility to leather garment exporters during 2002-2003.

Some of the other proposals made by Plgmea include blanket permission of five per cent on last year’s exports to exporters for importing accessories used in the production of leather garments.

Mr Fawad further said that Trade Development Authority of Pakistan (TDAP) should grant 75 per cent subsidy towards the cost of stand space and construction for international exhibitions, and give 50 per cent foreign subsidy on export of leather garments and leather goods.