LAHORE: The Pakistan Readymade Garments Manufacturers and Exporters Association has welcomed the withdrawal of customs duty on import of cotton yarn by the Economic Coordination Committee (ECC) of the Cabinet in order to ensure smooth supply of it to the value-added industry, hailing the efforts of the ministry of commerce in this regard.
“PRGMEA appreciates the efforts of Adviser to PM on Commerce and Investment Abdul Razak Dawood for presenting our demand before the ECC and hope the Cabinet will also approve it at the earliest,” said PRGMEA Central chairman Sohail Sheikh and chief coordinator Ijaz Khokhar.
Sohail Sheikh said that the government’s earlier decision of withdrawing five per cent regulatory duty in Dec 2020 on the import of cotton yarn and now removal of customs duty will greatly support the textile sector and contribute to the country’s economic stability.
“This is not an ideal situation, especially at a time when the exporters are facing financial crunch in the wake of 700 percent jump in sea freight charges and sharp depreciation of dollar against rupee, yet it would provide some cushion to the apparel sector, which is suffering a huge shortage of industry raw material, observed Ijaz Khokhar.
“We still thinks that the real solution of raw material shortage lies in opening of import through land route, as cotton yarn import via sea can never become the substitute of extremely low-cost yarn arrived via land route particularly in the wake of exorbitant hike in freight rates of shipping lines,” he added.
He asked the government that this relaxation of customs duty on yarn import should not be limited to just three months rather it should continue until the country is capable of meeting textile value-added industry’s demand of 10 million cotton bales. If this relief is withdrawn after June 2021 amidst shortage of cotton the export growth will be affected severely, which should be avoided at any cost, he said.
The PRGMEA leadership also reiterated its demand to the Prime Minister to pass directives for the forensic audit of the yarn producers to break cartel of cotton mafia.
They said that the Imran Khan government will have to take serious steps to break the textile industry cartel, giving it strong message that no cartelization would be allowed to manipulate prices in future and if they commit such crime they have to face the full brunt of law.
Sohail Sheikh said the country has been unable to achieve its full exports potential due to lack of product diversification and limited access to raw-material. To this effect, he added, the all taxes and duties on cotton yarn import should be terminated on long-term basis so that exporters could be able to achieve price competitiveness and product diversification.
As the country receives huge exports orders, local production of cotton is not sufficient to meet the demand of the textile. Cotton was not available at competitive prices due to the RD and hectic procedures, while the Covid-19 pandemic and subsequent lockdowns in recent past had also worsened the situation, he said.