FAISALABAD: The import of cheap Indian yarn in Pakistan has generated a divided response from the weaving sector and the spinning industry. While the latter appreciates its availability due to lower prices, the spinners are apprehensive and consider it a serious threat.

Owner of a leading spinning group of Faisalabad told Dawn that India expanded its capacity to hurt Pakistan economically by dumping its produce, forcing the key textile industry to crumble.

“In India, electricity is cheaper, and interest rates of banks and cost of doing business are low. There is no load-shedding of gas and electricity. How can the local spinning sector compete with India?” another businessman asked.

“If a yarn bag costs Pakistani spinners about Rs10,000, their counterparts from India are selling the same bag for Rs7,200,” he added.

Indian spinners have been dumping their duty-free yarn in Pakistan. They are also getting 2.5 per cent rebate from the Indian government. Whereas, Pakistani and even Chinese spinners have to pay 5pc duty on yarn export to India, sources in textile circles argued.

A businessman, who declined to own his comments, said, “About 25pc duty is imposed on fabrics. The All Pakistan Textile Mills Association had taken up the issue with relevant ministries but the government response is still awaited.”

He feared massive closure of mills if the government fails to take timely action.

On the other hand, Waheed Khaliq Ramay of Council of Loom Owners Association told Dawn that the availability of Indian yarn has benefitted weaving, though its low quality posed problems.

He said Indian yarn had reduced the prices of 40, 52 and 80 singles yarn that were common in use. He said now spinners were not in a position to exploit the weavers.

Ramay suggested that the government should devise a strategy to support weaving sector without hurting the local spinning industry.

Shahid Ali, a trader of fabric, told Dawn that the rate of fabrics was not stable because of influx of the Indian yarn as the buyers have panicked. He said availability of Indian yarn had increased the production and reduced the buying power of customers.He said different qualities of fabric have witnessed a fall in price by Rs4 to Rs6 per metre.