Importers for withdrawal of duty on spun yarn

Say it can substantially hurt textile industry, exporters

Textile importers have urged the government to withdraw the 2% regulatory duty imposed on spun yarn, arguing it can substantially hurt the textile industry as well as exporters.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Standing Committee on Imports Chairman Khawar Noorani requested Prime Minister Imran Khan to withdraw the regulatory duty on polyester spun yarn in order to protect the textile industry from disaster.

“If relief is not provided by the government to deal with the severe economic crisis in the wake of Covid-19 pandemic, we fear that the textile industry will reach the brink of collapse, and traders and industrialists will go bankrupt,” he said in a statement on Thursday.

Noorani added that the textile sector relied on imported polyester spun yarn to continue production activities because local manufacturers were unable to meet the demand of industries.

Currently, according to him, the local industry meets about 30-35% of total yarn demand of Pakistan while the remaining 65-70% is covered through imports.

“Despite this, local yarn manufacturers have created a monopoly and they continue to take full advantage of the lack of government supervision by setting arbitrary prices for yarn,” he said. He regretted that by imposing regulatory duty on yarn import, the government had jeopardised the entire textile sector while local yarn manufacturers continued to benefit.

Local manufacturers were taking full advantage of the imposition of taxes on imported raw material, he added.

“Textile sector is facing mammoth losses due to exorbitant taxes on the imported raw material,” he said. “While the entire sector has plunged into a severe crisis due to the Covid-19 outbreak, the imposition of regulatory duty on polyester spun yarn will completely destroy the textile sector.”

Noorani requested the prime minister to withdraw the regulatory duty on spun yarn in order to save the textile industry from complete devastation. “If textile factories close down due to excessive taxes and high production costs, thousands of workers will lose their jobs,” he cautioned.

Published in The Express Tribune, August 7^th, 2020.

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