'ECC decision on yarn import will affect textile export'

21 Apr '14

2 min read

The recent decision of the Economic Coordination committee (ECC) of the Cabinet to withdraw the five percent duty exemption on cotton yarn import would negatively affect the export of value-added textiles from Pakistan, M Jawed Bilwani, chairman of the Pakistan Apparel Forum, and chief coordinator of the Value-Added Textile Forum, has said, The News reported.

The decision of the ECC has been influenced by the spinning sector, which accounts for only 20 percent of the total textile exports from Pakistan, Mr. Bilwani said. He added that the value-added textile sector, which contributes around 80 percent to Pakistan’s overall textile exports, is not in favour of the withdrawal of the duty exemption on cotton yarn import.

According to Mr. Bilwani, the spinners will have a monopoly if the five percent duty exemption on import of cotton yarn is withdrawn by the Government, which would be detrimental to the value-added textile sector.

The appreciation of the Pakistani rupee against the US dollar in recent months is already affecting the value-added textile export sector, and the withdrawal of the duty exemption on import of cotton yarn would further aggravate the problem of the exporters. The ECC decision will lead to an increase in cotton yarn prices, which in turn, would raise the price of the value-added textiles, making them uncompetitive in the global market, Mr. Bilwani said.

The negative impact on Pakistan’s value-added textile exports because of the Government’s decision, will hamper the country’s exports to the EU markets under the GSP Plus status, he added.

Mr. Bilwani urged the Government to review the ECC decision to withdraw exemption of duty on cotton yarn import, and if the Government decides to stick to the decision it should also impose duty on cotton yarn export, otherwise, it would impact the country’s value-added textile export sector, which earns the largest amount of foreign exchange for the country.

Last week, the ECC of the Cabinet, which met under the Chairmanship of the Federal Minister for Finance Mohammad Ishaq Dar, decided to withdraw SRO 15(I)/2010, which exempted cotton yarn import from custom duty of 5 percent, in order to check import of cotton yarn.

During the eight-month period from July 2013 to February 2014, Pakistan’s textile and apparel exports increased by 8.28 percent year-on-year to US$ 9.155 billion, while its imports also grew by 2.92 percent year-on-year to$1.737 billion, according to the data from the Pakistan Bureau of Statistics.

Fibre2fashion News Desk - India

More Textiles News - Pakistan...