A prominent business leader has warned that Pakistan’s export industry is severely threatened by the expected free trade agreement (FTA) between India and the European Union, which could badly affect the country’s market share in key sectors.
Hanif Lakhaney, former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), pointed out this threat on Monday while welcoming the recently announced incentive package for the export sector by Prime Minister Shehbaz Sharif.
Mr. Lakhaney described the Prime Minister’s move as an indispensable step to revive the country’s manufacturing machinery and enhance its global competitiveness. He said that this timely package would breathe new life into the export industries at a critical juncture.
The concern is that the India-EU trade agreement could divert global buyers towards India, potentially harming Pakistan’s textile, leather, and light engineering industries.
To counter these challenges and compete effectively, Mr. Lakhaney urged the implementation of a zero-rated General Sales Tax (GST) system, stating that the current tax structure is eroding exporters’ profits.
He also stressed the need to establish a dedicated Export Development Fund to provide financial support to Pakistani businesses competing in international markets.
Emphasizing that maintaining GSP Plus status with the European Union is crucial, Mr. Lakhaney warned that this preferential access alone would not be sufficient after the implementation of the India-EU agreement, and more concrete measures would be needed.