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Government allows cotton import from India, but sets tougher rules

By Munawar Hasan & Shahid Shah
November 30, 2017

LAHORE/KARACHI: Government allowed cotton imports from India to meet the growing appetite of key textile industry, though it slapped tough set of rules for consignments from the neighboring country, officials said on Thursday.

“Pakistan is likely to start issuing permit for import of cotton from India through land route in a next few days under new tough conditions that may not fully ease already imposed restrictions on trade,” an official said.

Pakistan, which is the world’s fourth largest cotton producing country, falls short of around four million bales a year to meet the local demand of nearly 16 million bales. Officials said a permit from the Department of Plant Protection of Pakistan’s food ministry is mandatory, under the new phytosanitary conditions, for import of unprocessed cotton, including raw or seed cotton, cotton lint, linters, cotton waste and cotton stuffing from India.

The National Plant Protection Organisation would inspect and test the consignments according to appropriate procedures and to ensure the goods are free from biosecurity pests. “The goods must be clean and free of contaminant seed, soil and plant debris and other bio-security risk material prior to arrival in Pakistan,” the department said in a letter.

Pakistan used to import 0.5 to 2.8 million bales from India in the past, but the government suspended the import last year because of some objection of the Department of Plant Protection.

Naseem Usman, chairman of Karachi Cotton Brokers Association expected an import of around 0.7 million bales from India this year. Usman said textile mills have signed import contracts of 1.8 million bales from countries, including US, Brazil, South Africa and Middle East.

Ihsanul Haq, chairman of Pakistan Cotton Ginners Forum, however, said the new conditions would not help in fully restoring cotton trade between the two countries. A senior textile ministry’s official, defending the government’s move, said tough conditions are indispensable to protect any threat to local cotton crop. “Due to flawed cotton ginning process in India, it has been observed that cotton seed was also found in the imported consignments,” he said, requesting anonymity. “This seed may contain diseases and also carry eggs of various insects and pests. So, it is important to allow import of cotton after going through all phytosanitary requirements.”

Usman argued that Indian cotton is good in quality, “while it would be convenient for us to buy from India, as delivery time is short and price is feasible.” Haq agreed that the cotton prices would also fall in the local market following the import from the neighbouring country.

Textile mills have been long demanding restoration of cotton import from India, the world’s second biggest cotton producer, to meet shortfall in local production. All Pakistan Textile Mills Association (Aptma) also urged the government to immediately notify withdrawal of four percent customs duty and five percent sales tax and other non-tariff restrictions on import of cotton to enable the industry to meet its export commitments.

An Aptma official said the government should remove phytosanitary restrictions. The official said the government pledged to withdraw the import restrictions in the Prime Minister Trade Enhancement package in January. The department further said an Indian consignment arrived without valid import permit and phytosanitary certificate would be destroyed or deported.

“The department reserves the right, if considered necessary to cancel the import permit even after issuance on detection of bio-security pests/risks or any other violation of import conditions,” it said.  The department further said non-commodity concerns must be assessed, including container cleanliness, packaging and destination concerns, “and may be subject to inspection and treatment on arrival.”