Apparel sector wants tax-free yarn import

Senior official says lack of value-addition hurting competitiveness

LAHORE: The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) is urging authorities to relax duties on yarn import to encourage value addition, reduce cost of doing business and bridge the gap between production and consumption.

The statement comes as the government looks set to withdraw sales tax and customs duty on the import of cotton amid pressure from the spinning industry despite possibly adverse implication for growers and ginners,



PRGMEA Chief Coordinator Ijaz Khokhar asked the Textile Division to submit a summary to the Economic Coordination Committee (ECC) of the Cabinet for duty relaxation on yarn import in line with the benefits being provided to cotton spinners.

“To bridge the soaring trade deficit, the government will have to provide a level-playing field to the whole textile chain instead of supporting only yarn manufacturers, who have just around 350 units, against the value added sector which consists of 10,000 units across the country,” Khokhar said.

“With regards to employment generation, the spinning sector employs just 5% of the total textile labour force while the garment sector employs 95% of it,” he added.

Khokhar said that despite 1.86 million bales of cotton lying unsold in the country, the government is facilitating the spinning industry on the plea that domestic cotton is of short staple.



He argued that since the apparel sector already has a limited production line owing to lack of latest fabric varieties in the country, harsh duties on imports are resulting in a significant decline in apparel exports.

“High quality cotton yarn has to be imported for production of high value-added finished products,” Khokhar added.

“The availability of competitively priced and high-quality cotton yarn to value-added textile industry is the basic foundation on which export competitiveness is built,” the PRGMEA official said.

Published in The Express Tribune, December 19^th, 2017.

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