Challenges: APTMA urges cotton export to India be put on hold

Says export is against the interest of domestic textile industry

KARACHI: Amid a row with the government on the possible levy of duty on cotton imports from India, the All Pakistan Textile Mills Association (Aptma) on Monday urged the government not to allow cotton exports from Pakistan to India as it would hurt the domestic textile industry.

“The export of cotton to India in the absence of determination of the crop size for the next fiscal year (2016-17) is against the interests of the domestic textile industry,” Aptma Chairman Tariq Saud said.

The decline of the local cotton crop by 35% in 2015-16 had burdened the domestic industry which was importing about 4 million bales to meet its consumption needs, he added.

He said cotton cultivation this year was expected to fall approximately 25%, which would ultimately bring down harvest in the country.

The government should provide a level playing field and stop export of raw cotton until the determination of crop size for the next season, otherwise, it should remove 3% customs duty on the import of cotton, a press release quoted Saud as saying.



“The industry will be compelled to import cotton. If the government is allowing export of cotton, then it should withdraw the customs duty on imports so that the industry could remain competitive,” a textile industry official said.

“We have received reports that some ginners inked agreements with Indian cotton importers last week. The new cotton crop in Pakistan is expected to reach markets in a short time and if the government fails to intervene, more export orders will be finalised, eventually hurting Pakistan’s textile exports in the upcoming fiscal year.

“It does not make sense. You cannot import and export cotton at the same time,” he said, questioning the government’s approach.

India has been enjoying a surplus crop for over a year, but analysts say it has realised that its upcoming harvest will be affected by low cultivation and pest attacks. This is the primary reason why it now wants to shore up its cotton reserves.

Pakistan’s government slapped 1% duty on cotton import in the budget for 2014-15 while another 1% was added in the next budget. The duty went up to 3% when the government imposed 1% across-the-board import duty in November 2015 to boost the declining tax revenues.

To protect the interests of farmers, the Senate Standing Committee on National Food Security and Research has recommended an immediate ban on cotton imports from India.

Published in The Express Tribune, June 21^st, 2016.

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