Import of cotton yarn: PHMA urges govt to abolish customs duty, RD

LAHORE: The Pakistan Hosiery Manufacturers & Exporters Association (PHMA) on Sunday asked the government to abolish custom duty and regulatory duty on import of cotton yarn, besides allowing its arrival from all land routes including India, as cotton yarn is the major raw material of the value-added knitwear export industry.

PHMA Central Chairman Shahzad Azam Khan observed that the value-added garment and home textile exporters are facing severest ever shortage of cotton yarn which is basic raw material. If the cotton yarn is available in the country it is of substandard quality, he said and added that the export orders of value-added textile goods are available but the exporters are reluctant to materialize these orders in view of ongoing crisis of cotton yarn. In this scenario, such export orders meant for Pakistan can be diverted to other regional countries, he warned.

Presently, the value-added knitwear exports have been increasing which indicates that the demand of cotton yarn by the exporters has also been increasing. While there is a huge demand of cotton yarn in the Pakistani Value Added Textile Export Industry, the yarn manufacturers / spinners are exporting cotton yarn to our competitors in the regional countries. Meaning thereby, the yarn manufacturers on one hand are depriving the value-added textile sector with regards to availability of cotton yarn in Pakistan and on other hand are passing on the subsidy benefit being offered and given by the government in shape of supply of gas and power on concessional rates to the regional competitors, beside exporting cotton yarn, Shahzad Azam pointed out.

He stated that the value-added apparel sector contributes to more than 55 percent in total national exports, earns highest foreign exchange and provides huge employment, therefore, Cotton Yarn being the major raw material of the value-added textile industry, must be allowed duty-free import from all over the world by abolishing custom duty and regulatory duty. Needless to mention here that the sea freights are gone very high and increased by approximately 700% and there is also an acute shortage of containers/ vessels which has multiplied the delivery time from 45 days to 90 days. Therefore, the government must explore the shortest possible land routes to import cotton yarn, whether it is India, in order to support the textile industry to enhance exports. It is pertinent to mention that Pakistan is also importing medicines from India.

Further, in view of shortage of cotton yarn in the country, it is also imperative that government should also impose regulatory duty on export of cotton yarn below 40 all counts and rate of regulatory duty should be equal to subsidy impact which is being offered and given by the government to yarn manufacturers/spinners in shape of supply of gas and power on concessional rates.

Copyright Business Recorder, 2021