Prospects and Opportunities
The manufacturing sector constitutes about 20% of the output produced in the national economy with Punjab having nearly 70,000 major industrial units.
Pakistan is the 4th largest cotton producer and 3rd largest cotton user in the world. The textile industry derives its competitiveness from availability of cheap raw material i.e. cotton, a pool of skilled manpower and widespread ancillary support from dyeing, chemical and other industries.Punjab presents many opportunities in terms of greater integration and extension of forward linkages for expanding the retail and value added textile sector.
The industry carries immense export potential due to the ever growing demand for quality health relatedequipments. World market for surgical goods was over $100 billion in 2011 with Pakistan having meager share as compared to its potential. Value addition through introduction of modern technology and local brand development opportunities for exports are widely available.
Millions of vehicles were registered every year highlighting the vast potential of growth in the industry.With the relaxation in the import policy for vehicles, there is a need to cater to a wider array of cars that were previously not found on the market.
Incentives & Legal Framework
In a bid to achieve global competitiveness effectively and efficiently and to encourage industrial cauterization, the Government of Pakistan passed the Special Economic Zones (SEZ) Act in 2012.
♦ SEZs offer one-window facilitation services to investors in terms of providing information/facilitating and authorizing investment.
♦ SEZs reduce the cost of doing business, enhance productivity and encourage investments.
♦ Federal government agencies are required to provide gas, electricity and other utilities at the zero-point of the SEZs.
Industrial framework also offers attractive incentives package comprising of following:
♦ 0-5 percent Customs Duty on import of machinery for focal sectors
♦ No Sales Tax on import of machinery in specific industries
♦ Benefit from network of export processing zones / industrial estates
♦ Import of raw material for export manufacturing at zero rate
Additionally, all industries (especially textile) can benefit from benefit from Generalized System of Preferences (GSP+) for export to European Union.