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Friday, April 12, 2024

ECC approves withdraws cotton yarn import duty

The customs duty will remain zero until June 2021 but is subject to the approval of the Cabinet. It is done to facilitate the value-added exporters in the textile industry of the country.

The Economic Coordination Committee (ECC) of Pakistan on Wednesday approved the withdrawal of customs duty on import of cotton yarn till June 30 of 2021 to facilitate the textile sector, the finance ministry said here.

The top economic policymaking body took the step “to ensure smooth supply of cotton and cotton yarns to the value-added industry while bridging the gap between domestic production and overall demand for the inputs,” a statement by the ministry said.

Read More: APTMA rebuts arguments of garment makers regarding cotton yarn prices

Shortly after the committee’s decision, Abdul Razak Dawood, advisor to Pakistani prime minister on commerce, textile, industry and production, and investment said on Twitter that regulatory duty on cotton yarn import was already withdrawn in December of last year.

“ECC has withdrawn customs duty on import of cotton yarns to facilitate the Value-Added exporters. This will be notified with the approval of the cabinet,” he added.

This is a good step as it is a ray of hope for all the textile industry of Pakistan, which had seen ups in the 6MFY21 but began its downturn amid a significant decline in crop output and decreased supply of cotton yarn.

The increase in yarn prices had textile exporters requesting the government of the country to allow the import of cotton yarn from India, which had really low prices compared to Pakistan. The ECC even approved the import, only later to be rejected by the Prime Minister.

However, it is worth mentioning that the All Pakistan Textile Mills Association has always rejected the idea of importing as the organization believes that it will hurt the local farmers and cotton production in Pakistan in the long run.

The prices of cotton yarn are going down, but the textile manufacturers still complain about the price hike. This is the reason APTMA released a press release comparing Pakistan’s cotton yarn prices to the rest of the world, and it showed that Pakistan’s cotton Yarn prices were comparable to the international market.Regional Comparison

With the decrease in output, textile businesses fear an increase in prices and they believe could be controlled to get hold of export orders diverted from countries under coronavirus lockdown.

Read More: Textile Sector disappointed by cabinet’s decision

The government is yet to facilitate imports via land routes from Uzbekistan and India that are more cost-effective.