Apparel sector wants tax-free yarn import
LAHORE – As the government is all set to withdraw sales tax and customs duty on import of cotton on the demand of spinning industry, setting aside the interest of growers and ginners, the Pakistan Readymade Garments Manufacturers & Exporters Association has appealed the authorities to also relax duties on yarn import to encourage value addition, reduce cost of doing business and bridge the gap between production and consumption.
PRGMEA Chief Coordinator, Ijaz Khokhar asked the Textile Division to submit the summary to the ECC for duty relaxation on yarn import in line with the benefits being provided to the spinners.
“With a view to bridge the soaring gap of trade deficit, the government will have to provide level-playing field to the whole textile chain instead of supporting only yarn manufacturers, which have just around 350 units, against value added sector of 10,000 units across the country. With regard to employment generation, one spinning unit generates just 5% employment while garment unit creates 95% employment,” he added. Ijaz Khokhar said that despite the fact that around 1.86 million bales of cotton are lying unsold in the country but the government is going to facilitate the spinning industry on the plea that domestic cotton is of short staple, it will have to remove restrictions on yarn import too under the same plea.
He said since the apparel sector already has a very limited production line owing to lack of latest fabric varieties at local level the harsh duties are resulting into significant decline in apparel export. He said that apparel industry is already suffering with the low productivity due to shortage of cotton yarn, high energy cost, and discriminating import duties on the industry’s raw material.
“The high quality cotton yarn has to be imported for production for high value added finished products.”
He observed that the value-added textile sector is not against spinning sector but it wants that whole textile chain be safeguarded because the sector has a tough competition in garments with regional competitors like Bangladesh, China and India.
He said that PRGMEA, being one of the major value-added stakeholders, is playing pivotal role in earning foreign exchange as well.