Textile industry: CCRI Multan Head for aligning incentives to revive cotton sector

LAHORE: Sajid Mahmood, Head of the Transfer of Technology Department at the Central Cotton Research Institute (CCRI), Multan, has called for aligning textile industry incentives with efforts to revive Pakistan’s struggling cotton sector.

Addressing the critical challenges facing the cotton industry, Sajid Mahmood highlighted the recent demands made by the All Pakistan Textile Mills Association (APTMA), which include the reinstatement of the zero-rating policy for export manufacturing, the abolition of the 18 percent sales tax on local textile manufacturers, and the elimination of delays in GST refunds and additional export taxes.

While acknowledging the industry’s concerns, he questioned whether the textile sector was contributing sufficiently to resolving Pakistan’s cotton crisis or simply pursuing subsidies and incentives from the government.

Sajid Mahmood pointed out that in leading cotton-producing nations, the textile sector played a vital role in promoting cotton production, supporting farmers, and funding research institutions. Unfortunately, Pakistan’s textile industry appears reluctant to undertake similar initiatives. He emphasised the need for policymakers to condition industry incentives on measurable contributions to domestic cotton promotion, farmer support, and financial assistance to research bodies like the Pakistan Central Cotton Committee (PCCC).

He also advocated for the imposition of restrictions on duty-free cotton imports to protect local farmers and strengthen research institutions.

Sajid Mahmood stated, “This step is critical to boosting local cotton production and reducing our reliance on imports, which adds significant pressure to the national economy.”

He warned that Pakistan is expected to import over five million bales of cotton this year, valued at more than $2 billion, a trend that is unsustainable.

Highlighting the global dynamics, Sajid Mahmood cautioned that countries like the United States—now Pakistan’s largest cotton exporter—are unlikely to support efforts to enhance Pakistan’s cotton production and research capabilities.

To address these challenges, he urged policymakers to develop a comprehensive rehabilitation plan for the cotton sector. Such a plan would increase cotton production, stabilise the economy, and reduce the billions spent annually on cotton imports.

Sajid Mahmood also stressed the role of the private sector, urging the textile industry to step up and contribute to the revival of cotton production by supporting research institutions, providing farmers with advanced technologies, and promoting value addition.

He cited Bangladesh as an exemplary model, which earns over $40 billion annually from its textile exports using only seven million bales of cotton, compared to Pakistan’s $16-17 billion from 12 million bales. “Bangladesh focuses on exporting finished and branded products instead of raw materials, which significantly strengthens its economy. Pakistan must adopt a similar strategy,” Sajid Mahmood said.

He concluded by stating that Pakistan’s textile industry must move beyond raw material exports and embrace modernization and value addition, such as producing ready-made garments, home textiles, and branded products. “By adopting these strategies, the textile sector can play a transformative role in revitalizing the cotton industry, enhancing global competitiveness, and ensuring long-term economic stability for Pakistan,” he emphasised.

Copyright Business Recorder, 2024