LAHORE - After the recent imposition of 10 per cent regulatory duty on import of yarn and fabric, the yarn manufacturers have established a cartel across the country, which has resulted in lifting yarn rate by 50 per cent to Rs1200 per 100 pounds bag from Rs800 in just a couple of weeks.

Industry stakeholders said that though the implementation of another 10% duty’s imposition on yarn would be started from next month yet the additional cost is being included on yarn import deliveries to the apparel sector since the finance minister made announcement in this regard. Even the consignments booked in advance are also being blocked while the local manufacturers have directed their dealers to stop floating new orders till the imposition of additional tax.

“PRGMEA appeals the government to revisit the imposition of additional regulatory duty decision and take all sub sectors of the textile chain on board before making the final decision because the Prime Minister has yet to meet with the export-oriented industries and hold a last round of talks with them.”

PRGMEA chief coordinator Ijaz Khokhar said that prevailing situation clearly indicates that the government is promoting yarn cartel, because the authorities did not bother to take their own ministries of Commerce and Textile onboard while making this blunder. “These ministries strongly opposed the unilateral proposal of the finance ministry which would hit the whole value-added apparel sector.

As apparel sectors already have a very limited production line owing to lack of latest fabric varieties at local level the harsh duties would result into significant decline in apparel export.

Ijaz khokhar said that apparel industry is already suffering with the low productivity due to shortage of electricity and gas. Unit cost of doing business had gone very high to compete with our regional competitors. The government, instead of lowering power tariff, removing GIDC or clearing outstanding refunds to facilitate the whole chain of textile sector, has taken discriminatory decision to upset the free market economy- the slogan raised constantly by the spinning mafia.

It is unfortunate that a case of anti-dumping against Indian yarn import by the spinning mills is still pending with National Tariff Commission (NTC) which is authorized to investigate any escalation in import and advise the government to rationalize customs tariff to keep balance among all sub sectors of textile chain. But finance ministry is so powerful that it did not bother to consult the NTC before imposing additional taxation measures.