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Pakistan textile sector welcomes MFN with India

Nov '12
Mr Ahsan Bashir
“We favour opening up of trade with India with respect to the ‘Most Favoured Nation’ (MFN) status granted to India recently by Pakistan. The textile sector from both India and Pakistan, should explore the competitive advantage inherent in both the countries”, said a top official of an influential textile trade lobby in Pakistan.

These comments came in the backdrop of the Pakistan Textile Ministry recently raising concerns over eliminating the negative list with immediate effect. It suggested that the negative list should be reviewed in detail and extensive discussions should be held with stake holders and their opinions should be heard.

The Pakistan Ministry is of the opinion that the future of the domestic textile industry looks bleak because of the quick decision to open Pakistani markets to Indian textiles. It says that allowing imports at reduced rates under MFN will swallow up the local textile sector. It also adds that time should have been given to the local sector to build competitiveness before whittling down the negative list of items.   

“The MFN will favour areas in which each of the country is strongest. For example, Pakistan is strong in coarse cotton and coarse cotton yarn. We would favour exporting the same to India, rather than China and other countries”, Mr Ahsan Bashir – Central Chairman of All Pakistan Textile Manufacturers Association (APTMA) told fibre2fashion.

“Similarly, India has advantage in fine count cotton yarns as well as the polyester segment. Indian producers can explore opportunities to export the same to Pakistan. Currently Pakistan is importing these goods from other countries. The biggest advantage will be reduced transportation costs and shorter lead times”, he said.  

“India also has very good dyes, chemicals and auxiliaries industries. Currently, Pakistan imports these from other countries in huge quantities. We could explore importing the same from India, which could prove to be an advantage for us, again due to lower logistic costs and shorter lead times”, he added.

“However, the concerns raised by the Pakistani Textile Ministry too are valid”. Giving an example, he said, “Suppose there is a 10 percent import duty levied on imports of cotton yarn by India and if Pakistan does not impose the same, the Ministry is asking for such anomalies to be reviewed and streamlined”.

He further informed, “Other than coarse cotton and yarns, the Pakistani textile industry is very strong in fabrics, particularly ‘Lawn’ fabrics for womenswear, which is mainly worn in summers. The domestic market for Lawn fabrics is very huge in Pakistan. Considering the same culture and climate in both countries, I foresee a big market in India for the fabric, too.

“Also there are many fabric and fashion brands in India as well as Pakistan. They can explore options to set up operations in the other country, beginning with offices and later setting up retail chains. Again each of them will benefit from the similar fashion trends prevailing in both the countries”, he wound up this very interesting chat by saying.

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