KARACHI, July 12: The Federation of Pakistan Chambers of Commerce and Industry has strongly reacted to the reports about allowing cotton export to India.

The Indian government removed 14 per cent duty on cotton import and as a result the Indian importers increased their demand for Pakistani cotton.

FPCCI president Tanvir A. Sheikh said in a statement on Saturday that Pakistan’s annual production of cotton was about 11.5 million bales and country’s requirement stands at 16 million bales, leaving a shortfall of over 4 million bales. It is also notable that about 1.6 million bales were imported from India last year.

“If the government does not impose ban on the export of cotton the local industry will face serious shortage of lint in the coming year. It will be a repetition of the problem seen in the recent past when the government did not check the export of wheat and by the end of the year we had to import the commodity at exorbitantly high price to fulfil our local demand,” he remarked.

Mr. Tanvir demanded that the government should immediately reverse this decision otherwise the textile industry will face problems. The permission to allow export of cotton to India is not at all in the interest of the country, he added.

He also expressed his serious concern over the increasing trend in trade deficit. He said that though the country achieved 99 per cent of export target in 2007-08, the trade deficit is still more than $18.7 billion. Higher growth in import is the major cause of rapidly increasing trade deficit.

The FPCCI chief said that Pakistan spent more than $2 billion on the import of transport goods, out of which more than 50 per cent foreign exchange was consumed by the import of motor vehicles.

It is also astonishing that more than $3.5 billion were spent on the import of power generators, mobile sets, electrical appliances and other luxury items. $0.6 billion were spent on import of mobile sets only.

To control the trade deficit it is necessary to improve the competitiveness of the domestic industry, which will not only create export surplus but will also increase import substitution.—PPI