Apparel industry seeks duty-free yarn import
The apparel segment is the highest value-added link in the entire textile value chain. Though the global market is highly competitive, Pakistan’s apparel industry has proved its strength by pushing exports by 5.55% in 2016-17. PHOTO: FILE
The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has urged the government to continue duty-free import of cotton yarn until the country achieves self-sufficiency in the raw material production.
“Pakistan has been unable to realise its full export potential due to the lack of product diversification and limited access to raw material,” newly elected PRGMEA Regional Chairman Sheikh Luqman Amin said. He said that all taxes and duties on cotton yarn import should be withdrawn on a long-term basis to ensure price competitiveness and product diversification.
In April 2021, the Economic Coordination Committee (ECC) of the cabinet had withdrawn customs duty on cotton yarn import for a period of three months, he recalled, adding that the move supported the apparel sector and the national economy.
“As the relief ended in June 2021 amid cotton shortage, export growth is expected to be affected severely, which should be avoided at any cost,” he said.
He highlighted that the government had also withdrawn 5% regulatory duty on cotton yarn import in December 2020, adding that both concessions should continue “until the country is capable of meeting textile industry’s demand for 10 million cotton bales”.
He lamented that exporters had stopped booking international orders due to the price factor and artificial shortage of cotton yarn created by the spinning industry, which was holding stock of the commodity in the hope of further rate hike.
Amin requested Prime Minister Imran Khan to direct the ministries concerned to prepare a strategy to help the apparel industry stay afloat.
On the occasion, PRGMEA Chief Coordinator Ijaz Khokhar appealed to Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood to put the association’s demand before the ECC “as the shortage of yarn persists and exporters are not booking international orders due to scarcity of raw material”.
“At a time when the exporters are facing financial crunch in the wake of 700% jump in sea freight charges and uncertainty about the rupee-dollar exchange rate, the duty-free raw material will provide some cushion to the apparel sector,” he observed.
He termed the import of cotton yarn through land route as the solution to raw material shortages, particularly when shipping lines had hiked freight charges.
Published in The Express Tribune, September 30th, 2021.
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