The Pakistani market is flooded with Indian Acrylic Yarn, as the massive import of this item is continuing at very nominal Custom Duty under HS Code: 5509.3200 through Wagha border, hurting the local industry.

The local industry of Acrylic Yarn, having more than 1500 units in Gujranwala, is at verge of collapse and continues to shut down due to overloaded supply of Indian yarn in local market. “Almost 450,000 workers directly associated with Acrylic Yarn industry are likely to get jobless, which will increase the poverty levels not only in Gujranwala and Faisalabad districts but also throughout the country,” warned President Gujranwala Chamber of Commerce & Industry Samee Ullah Ch.

The regulatory duty (10%) was imposed on cotton yarn import to protect the local production units while Acrylic Yarn was kept out of loop. The same regulatory duty of 10% must be imposed on Acrylic Yarn to save local units, demanded president GCCI.

“It is not understandable that why RD is imposed on imports of cotton yarn only whereas, the Acrylic Yarn has been kept out of it. The RD (10%) is the only solution to safeguard the local industry. Regulatory duty should be imposed on import of Acrylic Yarn in same conjunction as was imposed on Import of Cotton Yarn (10%).”

The Acrylic Yarn import has increased manyfolds since the trade through Wahga border is carried out. The cost and time efficiency and the Safta preferential tariffs (5%) are causing Acrylic yarn mills closure. The Custom Duty of Acrylic Yarn from India is fixed at 5% under SAFTA rate that makes it competitive to import in Pakistan. The item is in positive list through Wahga border hence causing effective transit cost and time.

The ITP (evaluation) rate as fixed by Evaluation Ruling 4-Dec-2012 on import of Acrylic Yarn is $4.80 per kg. The imports from Karachi port are being accessed on fixed rate ($4.80 per kg) though, the evaluation at T-10 Terminal (Railway Shed) Lahore is being accessed at less than $2.50 per kg, hence making imports further feasible and competitive.

Khwaja Arshad, a woolen miller and representative of Acrylic Yarn industry, observed that he used to have 10,000 spindles running in his mills. “But we partially closed out our unit and started importing the Indian yarn for the last six months. What else we can do if the government itself wants to turn the country into trade hub instead of promoting industry.”

He said that with soaring cost of doing business only government protective measures can ensure the survival of local industry of Acrylic Yarn that is well equipped to cater the demand of Local requirement. It would further generate employment, increase in revenue collection, reducing the import budget imbalance, besides improving foreign reserves and economy growth.