PESHAWAR: Chairman Khyber Pakhtunkhwa Textile Mills Association (KPTMA), Sikandar Kuli Khan Khattak has raised grave concerns over the alarming surge in yarn imports under the Export Facilitation Scheme (EFS) and termed them a serious threat to the survival of the domestic spinning industry, especially in Khyber Pakhtunkhwa.
Khattak highlighted that yarn imports under the EFS have skyrocketed by an astonishing 350%, with imports of both Cotton and MMF yarn increasing from 7,800 metric tons in January 2024 to 28,306 metric tons in February 2025.
This surge now accounts for over 30% of the total production of the domestic spinning industry. The repercussions are severe, as more than 40% of spinning mills have been forced to shut down, with many others scaling back operations due to the flood of cheaper imported yarn into the market.
The impact is particularly dire for mills in Khyber Pakhtunkhwa, a landlocked province that faces significant logistical and cost challenges. Local mills are now struggling with severe liquidity issues, exacerbated by the increased competition from subsidised imports. Many mills have been compelled to reduce their production by up to 40%, putting their financial stability and ability to meet obligations at significant risk.
Khattak further criticised the misuse of the EFS, which was originally designed to facilitate the export of textile products. A significant portion of the yarn imported under the scheme, intended for export use, is being diverted to the domestic market.
The misuse, he said not only harms local yarn manufacturers but also enables certain unscrupulous businesses to evade sales tax and customs duties, resulting in millions of rupees in lost government revenue. Consequently, the domestic industry is suffering, and thousands of textile workers are losing their jobs and livelihoods.
Copyright Business Recorder, 2025
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