The clothing industry aims for duty-free yarn imports

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LAHORE:

The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has urged the government to continue duty-free imports of cotton yarn until the country becomes self-sufficient in raw material production.

“Pakistan was unable to realize its full export potential due to a lack of product diversification and limited access to raw materials,” said the newly elected PRGMEA regional chairman Sheikh Luqman Amin. He said that all taxes and duties on cotton yarn imports should be abolished in the long term to ensure price competitiveness and product diversification.

In April 2021, the Cabinet’s Economic Coordination Committee (ECC) had abolished tariffs on cotton yarn imports for a period of three months, he recalled, adding that the move helped the apparel sector and the economy.

“With relief ending in June 2021 amid the cotton shortage, export growth is likely to be severely impacted, which should be avoided at all costs,” he said.

He stressed that the government also withdrew a 5% regulatory tariff on cotton yarn imports in December 2020, adding that both concessions should continue “until the country is able to meet the textile industry’s demand for 10 million bales of cotton “.

He complained that exporters had stopped booking international orders because of the price factor and the artificial scarcity of cotton yarn created by the spinning industry that was holding the goods in stock in hopes of further interest rate hikes.

Amin called on Prime Minister Imran Khan to instruct affected ministries to work out a strategy to help the clothing industry stay afloat.

On this occasion, the PRGMEA chief coordinator Ijaz Khokhar appealed to the Prime Minister’s advisor for trade and investment, Abdul Razak Dawood, to present the association’s request to the ECC, “as the yarn shortage persists and exporters do not book international orders due to the scarcity of raw materials”. “.

“At a time when exporters are facing a financial crisis due to the 700 percent rise in ocean freight charges and uncertainty about the rupee-dollar exchange rate, the duty-free commodity will put some dampening on the apparel sector,” he noted.

He described the import of cotton yarn by land as a solution to raw material shortages, especially when shipping companies had increased freight costs.

Published in The Express Tribune, September 30thNS, 2021.

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