LAHORE: The government must ensure
availability of raw materials to the struggling textile industry as promised
under Prime Minister’s Export Package at the earliest, All Pakistan Textile
Mills Association (Aptma) said on Monday.The textile industry is becoming economically unviable due to rising domestic
cotton prices on the back of another short crop and restrictions on import of
cheaper fibre from India, the association said.However, the government’s policy
of encouraging the use of Indian yarn and fabric by value-added textile sector
is hurting the industry, Aptma leaders maintained.
Industry sources said restrictions on import of cotton from India and Brazil
has already spiked the price of local cotton to above Rs7,000 per maund as the
country is going to harvest short crop for the fourth consecutive year. In
comparison, Indian cotton is available at around Rs6,000 per maund.The import curbs have affected our international competitiveness because we are
forced to pay a higher price for raw materials due to wrong government
policies, Aptma leaders said.According to a Lahore-based customs clearing
agent, the government charges five per cent sales tax and 4pc customs duty on
imported cotton in addition to 1pc advance income tax. The government has also
placed an unannounced ban on import of cheaper cotton via Wagah using
non-tariff barriers.
“Both the measures restricting import of Indian cotton from Wagah for
Punjab-based factories and imposition of 10pc tax on cotton imports were taken
in the name of protecting the strong farmers’ lobby, with the aim to retain
their support in the upcoming election-year,” a factory-owner said.“While
cotton import is banned or restricted, you can freely import duty-free yarn and
fabric from India and claim 6-7pc rebate that should principally be available
only on export of made-ups and garments made from indigenous raw materials,”
said Aptma chairman Aamir Fayyaz.
He contended that it was a wrong government policy to ban Indian cotton in
‘bond for exports’ and allowing yarn and fabric from India in ‘bond duty free’.According
to a senior Aptma group leader Mr Gohar Ejaz, curbs on import of cotton to meet
requirements of the local industry do not make sense as 80pc textiles were
exported. He said textile exporters could not survive the ‘higher than global
prices’ of local cotton.Urging government to immediately withdraw non-tariff curbs on import of cotton
from India and Brazil, Aptma leaders said the factories in Punjab direly
require contamination-free, fine and medium staple cotton to produce quality
goods for domestic and global markets.
Source: Business Recorder, Pakistan Wednesday, 15 November 2017