Garment exporters recently appealed the authorities concerned to relax duties on yarn imports to encourage value addition, reduce the cost of doing business and bridge the gap between production and consumption. The government is all set to withdraw sales tax and Customs duty on cotton imports on the demand of the spinning industry, setting aside the interest of growers and ginners, they said. Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) Chief Coordinator Ijaz Khokhar urged the Textile Division to submit the summary to the Economic Coordination Committee (ECC) of the Cabinet for duty relaxation on yarn imports in line with the benefits being provided to the spinners.
“With a view to bridge the soaring gap of trade deficit, the government will have to provide a level-playing field to the whole textile chain instead of supporting only yarn manufacturers, which have just around 350 units, against the value-added sector of 10,000 units across the country.” With regard to employment generation, one spinning unit generates just five per cent employment, while garment unit creates 95 per cent employment, he added. Khokhar said that despite the fact that around 1.86 mn cotton bales are in stock in the country, but the government is going to facilitate the spinning industry on the plea that domestic cotton is of short staple.
It will have to remove restrictions on yarn imports also under the same plea, he said. Since the apparel sector already had a very limited production line, owing to the lack of latest fabric varieties at local level, harsh duties are resulting in significant decline in apparel exports, Khokhar said. The PRGMEA Chief coordinator said apparel industry was already suffering with the low productivity due to shortage of cotton yarn, high energy cost, and discriminating import duties on the industry’s raw material. “The high quality cotton yarn has to be imported for production for high value-added finished products,” he added.
The provision of competitively priced quality cotton yarn to the value-added textile industry is the basic foundation on which export competitiveness is built, he said, adding that the apparel sector, mostly consists of small and medium units, strongly oppose any regulatory duty imposed on yarn imports and also strongly oppose any barrier on the import of fabric for garments export under free market economy. The value-added textile sector is not against the spinning sector, but it wants that the entire textile chain should be safeguarded because the sector faces a tough competition with regional competitors such as Bangladesh, China and India. Pakistan Readymade Garments Manufacturers and Exporters Association, being one of the major value-added stakeholders, is playing a pivotal role in bringing the foreign exchange to the country, he added.