LAHORE - The textile spinning sector of the country has deviated from its stance of ‘free market economy mechanism’ as the textile representative body has requested the government to intervene and impose a duty of at least 5 per cent on import of cotton yarn from India which is presently coming into Pakistan on zero-rate under the free market mechanism .
APTMA central chairman Yasin Siddiq, in a letter written to Secretary Textile Industry Rukhsana Shah, has appealed to create restrictions on import of Indian cotton yarn which is cheaper by 15-20 per cent compared to local market .
Taking action on the APTMA letter, the Textile Ministry has sought recommendations from the value-added textile sector, as to what is its position in this regard.
The representative body of value-added textile sector, the PRGMEA chief coordinator and former chairman Ijaz Khokhar condemned the double standard of spinning sector and said that the sector always raises the slogan of free market mechanism only for its own interests.
“In the time of cotton yarn shortage in the country, the All Pakistan Textile Mills Association had rejected the value-added textile sector’s demand to ban yarn export on the plea that it would be the intervention in free market mechanism . And now when yarn global price is on declining trend and spinners are unable to export additional goods at lower prices, they want to sell it at high rates forcibly in local market . Now they have set aside the argument of free market economy and want the government to help them through imposing duties on import of yarn.”
Ijaz Khokhar lamented that with strict import policies in Pakistan, the local garment industry is not fully prepared to take advantage of duty-free access to the EU market under GSP Plus status mainly due to shortage of raw material, he added.
“Besides improving law and order, controlling terrorism and providing non-stop gas and electricity supply, the government would have to relax import policy to empower value-added textile industry to get maximum benefit of GSP Plus status, as the country had no raw material, he noted.
He appealed the government to continue to present policy of zero-rated yarn import from India not only for garment sector but also for all sectors including weavers.
He said that presently our competitor Bangladesh is enjoying duty-free import of every raw material, he said. As a result, Bangladesh value-added textile exports have surged to $26 billion without producing a single bale of cotton.
Yasin Siddiq was of the view that situation has completely changed as the production of cotton yarn in the country since June 2009 has been increased by about 10pc, on the other hand price in the international market has also been reduced by about 25pc. Further import of cotton yarn from all over the world has increased by 15,580 tons or 254.28pc in the last fiscal year as compared to the preceding year. He added that import of cotton yarn only from India has been increased by 12,092 tons or 257.23pc, which shows that about 78pc of cotton yarn imported in Pakistan comes from India.
He demanded the reversion of Pakistan’s cotton yarn tariff back to 5pc from zero, which was done as a temporary measure by withdrawing SRO 15(1)/2010.