Pakistan News

Textile mills want duty-free cotton imports

Textile mills want duty-free cotton imports

LAHORE: The All Pakistan Textile Mills Association (Aptma) on Thursday urged the government to immediately remove 4 per cent customs duty and 5pc sales tax on cotton imports to help the spinning industry stay competitive.

On the other hand, the Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) has sought immediate removal of 10pc regulatory duty, customs duty and other taxes on the import of yarn form all countries.

Aptma Chairman Tariq Saud in a statement said the government had imposed regulatory duty because Indian mills were dumping cotton yarn into Pakistan. This was the only protection available to the Pakistani industry, he said.

Mr Saud said the policy had proved successful and garment exports registered a 5pc increase. India, on the other hand, imposed a 26pc import duty on Pakistani cotton yarn. “Unless we get reciprocal market access, there is no other way except keeping the regulatory duty on imported yarn.”

He added that duty taxes remission on exports (DTRE) had surged by over 800pc for which “we have no protection”.

“High cost of doing business and tariff subsidy to yarn exporters of India have also crippled Pakistan’s textile industry, especially the spinning and weaving industry,” he said.

He also reminded that exports of cotton yarn plunged by 32pc year-on-year during the first 11 months of 2015-16, mainly due to non-availability of raw cotton because of 35pc fall in output and import duty of 4pc and sales tax of 5pc on imports.

In another statement, Prgmea chief coordinator Ijaz Khokhar said the apparel industry had been facing severe shortage of cotton yarn at a time when international buyers were planning to place orders for Christmas.

He said the local garment industry was not capable of entertaining the international market generally due to price factor and especially because of artificial shortage of cotton yarn created by the spinning as well as ginning industry which were holding stock in the hope of further hike in rates.

“Overburdened by more than 11pc multiple taxes and utility cost, the apparel industry demands at least 15pc special support to stay in the international exports market. Otherwise, all current business will be shifted to other countries,” he said.

He requested the prime minister to direct the ministries concerned to focus on the value-added sector and prepare a solid strategy to help the industry stay afloat.

Published in Dawn, July 22nd, 2016

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