The All Pakistan Textile Mills Association (APTMA) has said that the government must ensure availability of raw materials to the struggling textile industry as promised under Prime Minister’s Export Package at the earliest). 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 Rs 7,000 per maund as the country is going to harvest short crop for the fourth consecutive year. In comparison, Indian cotton is available at around Rs 6,000 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 10 per cent 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.