Yarn import: Textile industry objects to increase in duty

Says move will affect the cost of doing business.

KARACHI: The value-added textile sector has expressed dismay over the proposal of the government to impose an additional import duty on cotton yarn.

Pakistan Apparel Forum Chairman M Jawed Bilwani on Wednesday said that instead of removing the already imposed 5% import duty, the government is trying to impose more duty at the behest of large spinners.

“Any additional import duty on yarn will significantly hamper the cost of doing business as the value-added textile sector’s exports are now touching $11.49 billion,” he added.

He objected to the government’s move that did not take the stakeholders on board before deciding on such crucial matters.

He said that the spinners always voiced their support for a free market economy. Now just for their benefit, they are going against the principles of free market economy and are misguiding the government.

“The value-added textile export sector fails to understand why the government wants to give protection to the spinning industry,” he said. “It is actually the producers of finished textile products that need protection as they contribute more than 80% to the total textile exports and employ up to 38% of the total workforce of the country.”

“The textile exports of Bangladesh are touching $25 billion despite the fact that they do not grow cotton and produce finished textile products with the imported yarn,” he added.

Different countries all over the world discourage the export of raw material while allowing import of raw material and encourage value addition to earn more foreign exchange, he said, adding that unfortunately, in this country, it is the opposite and essential raw material for value addition is allowed to be exported.

He asserted that the value-added textile sector should be allowed duty-free import of raw material without any hurdles. The spinners should endeavour to become more efficient instead of demanding import duty on the import of raw material for the producers of finished textile products.

Published in The Express Tribune, February 5^th,  2015.

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