KARACHI: The value-added textile sector and spinners, two powerful lobbies, are testing the nerves of policy makers in Islamabad over the issue of cotton import.
Both sides are putting up their cases forcefully to convince the government to support their position. While leaders of value-added textile sector are seeking withdrawal of 5 per cent duty on import of cotton yarn, the spinners lobby All Pakistan Textile Mills Association (Aptma) strongly opposes it.
The leaders of value-added sector under the umbrella of Pakistan Apparel Forum (PAF), a platform of 12 trade bodies, argue that globally import of raw material is allowed duty free while exports of raw material is restricted.
However, Aptma believes that heavily subsidised Indian fine count cotton yarn is causing grave harm to 30 local producers of yarn and the government should immediately impose 15pc regulatory duty. They quoted figures to show the surge in import of fine count cotton yarn from India.
The PAF leaders contested the wisdom of protecting the interest of only 30 units producing fine count cotton yarn at the cost of thousands of value-added textile units spread all over the country.
They said that already there is 5pc import duty on cotton yarn, increasing the cost of production and rendering production uncompetitive in the world market.
In support of their argument, they said spinners are doing well as there are no reports of any closures whereas multiple units engaged in production of garments, hosiery goods, apparel, home textiles and bed wear are on losing end.
There was no duty on import and export of cotton yarn till 2014 when government imposed 5pc customs duty on import of raw cotton.
The textile made-ups share in exports was claimed to be 83.64pc. It employs 18 million workforce against 0.28 million by spinning units.
The Aptma leader (Sindh-Balochistan region) on Saturday complained that Indian and Chinese manufacturers of man-made fibre enjoyed advantage over local producers.
He further said that both countries have huge production base of man-made fibre which gives them competitive edge over local manufacturers of polyester fibre. As a result of this, the local producer of blended yarn faces threat from Indian yarn.
Published in Dawn, February 8th, 2015