Last update: Sat, 13 Feb 2016 05pm

10 percent RD on cotton yarn import rejected

Value-added textile sector has harshly reacted to the government's decision to slap 10 percent regulatory duty on cotton yarn import from India, effective from November 1, 2015, saying the move left National Tariff Commission (NTC) irrelevant. Talking to Business Recorder, Chairman, Pakistan Apparel Forum, Muhammad Jawed Bilwani said that the value-added textile was a bigger part of the sector.

He said that the associations continued to perform well in the country's overall exports, adding that the spinning sector had a secondary stakeholder. "The performance of value addition by Woven Garments Sector is 846 percent, Hosiery/Knit Garments 616 percent and Spinning Sector is 59 percent," he maintained.

The spinning mills filed a case of anti-dumping against Indian cotton imported in the country, still pending with the NTC - an autonomous investigation body handling trade and tariff issues, besides safeguarding industry against surging imports, advising the government on matters related to industrial competitiveness, promotion of exports and customs tariff rationalisation, etc, he said.

"But the government without consulting the National Tariff Commission increased the regulatory duty from 5 percent to 10 percent on import of cotton yarn and fabric from India from November 1, 2015," he showed concerns, saying that if the government wished to take decision on its own then it should abolish the NTC.

Bilwani said that the government through Import Policy 2013-15 had banned the Indian fabric import with already placing a 10 percent regularity duty on it. "From which it is clearly evident that our government has not done any homework nor examined the pros and cons but simply met the demands of the spinners, which clearly proves that the government is bent on favouring the spinners," he added.

The emerging textile report of India cotton yarn export per destination indicates that the neighbouring country's exports of the commodity to Pakistan during 2014 was 25,983 metric tons at higher value ie $4.09 per kilo while during the same year it exported the same commodity of 521,831 metric tons at $2.91 per kilo to China; 158,466 metric tons at $3.52 per kilo to Bangladesh; 59,812 metric tons at $3.29 per kilo to Egypt; 51,072 metric tons at $3.39 per kilo to Vietnam; 28,033 metric tons at $3.19 per kilo to Colombia and 13,763 metric tons at $3.79 per kilo to Turkey, he pointed out.

Some 90 percent value-added textile sector does not acquire Long Term Financing (LTF), he said that even a majority of small and medium sized units failed to get Export Refinance, showing the government's support to the Large Size Units. He blamed that the government's policies were hitting hard SMEs despite the sector was providing huge employment including poor female workers.

Only those countries have increased their exports which facilitate, encourage and protect the stitching sector, he said, adding that the government had always adversely played a role to scale back the apparel productivity. "If our government protected the stitching sector, our exports would have been more than our competing countries - Bangladesh and India," he said.

Worldwide exports of raw materials are discouraged and restricted but not their imports just to help carry out value addition of the related products with a view to earn more foreign exchange, Bilwani said, adding that in comparison to global practice, Pakistan always stepped up other way around.

He asked the government to withdraw the imposition of 10 percent regulatory duty on import of cotton yarn and fabric. He said that the government should stop ruining value added textile sector. He proposed the government to safeguard and protect growers and should place regularity duty on import of cotton instead.

Copyright Business Recorder, 2015