LAHORE: The government must ensure availability of raw materials to the struggling textile industry as promised under Prime Minister’s Export Package at the earliest, All Pakistan Textile Mills Association (Aptma) said on Monday.
The textile industry is becoming economically unviable due to rising domestic cotton prices on the back of another short crop and restrictions on import of cheaper fibre from India, the association said.
However, the government’s policy of encouraging the use of Indian yarn and fabric by value-added textile sector is hurting the industry, Aptma leaders maintained.
Industry sources said restrictions on import of cotton from India and Brazil has already spiked the price of local cotton to above Rs7,000 per maund as the country is going to harvest short crop for the fourth consecutive year. In comparison, Indian cotton is available at around Rs6,000 per maund.
The import curbs have affected our international competitiveness because we are forced to pay a higher price for raw materials due to wrong government policies, Aptma leaders said.
According to a Lahore-based customs clearing agent, the government charges five per cent sales tax and 4pc customs duty on imported cotton in addition to 1pc advance income tax. The government has also placed an unannounced ban on import of cheaper cotton via Wagah using non-tariff barriers.
“Both the measures restricting import of Indian cotton from Wagah for Punjab-based factories and imposition of 10pc tax on cotton imports were taken in the name of protecting the strong farmers’ lobby, with the aim to retain their support in the upcoming election-year,” a factory-owner said.
“While cotton import is banned or restricted, you can freely import duty-free yarn and fabric from India and claim 6-7pc rebate that should principally be available only on export of made-ups and garments made from indigenous raw materials,” said Aptma chairman Aamir Fayyaz.
He contended that it was a wrong government policy to ban Indian cotton in ‘bond for exports’ and allowing yarn and fabric from India in ‘bond duty free’.
According to a senior Aptma group leader Mr Gohar Ejaz, curbs on import of cotton to meet requirements of the local industry do not make sense as 80pc textiles were exported. He said textile exporters could not survive the ‘higher than global prices’ of local cotton.
Urging government to immediately withdraw non-tariff curbs on import of cotton from India and Brazil, Aptma leaders said the factories in Punjab direly require contamination-free, fine and medium staple cotton to produce quality goods for domestic and global markets.
Published in Dawn, November 14th, 2017