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April 16, 2021

PRGMEA seeks duty free yarn import till self sufficiency

Business

April 16, 2021

LAHORE: Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) requested the government to continue importing cotton yarn without customs and regulatory duty till the country became self sufficient in the raw material.

PRGMEA hailed the decision taken by the Economic Coordination Committee (ECC) of the Cabinet to withdraw customs duty on import of cotton yarn in order to ensure smooth supply of it to the value-added industry. The value-added sector also appreciated the efforts of the ministry of commerce in this regard, as this would help increase the country’s exports.

PRGMEA Central Chairman Sohail Sheikh and Chief Coordinator Ijaz Khokhar lauded the efforts of Adviser to PM on Commerce and Investment Abdul Razak Dawood for presenting their demand before the ECC.

The government’s earlier decision of withdrawing five percent regulatory duty in December 2020 on the import of cotton yarn, and now removal of customs duty would 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 think 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 via land route particularly in the wake of exorbitant hike in freight rates of shipping lines,” he added.

PRGMEA 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 was 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“If this relief is withdrawn after June 2021 amidst shortage of cotton, export growth will be affected severely, which should be avoided at any cost,” Khokhar said.

PRGMEA leadership also reiterated its demand to the prime minister to pass directives for the forensic audit of yarn producers to stop cartelisation.

Pakistan has been unable to achieve its full exports potential due to lack of product diversification and limited access to raw-material.

All taxes and duties on cotton yarn import should be terminated on long-term basis to achieve price competitiveness and product diversification, he added.