The federal cabinet’s decision of deferring the Economic Coordination Committee’s (ECC) decision to allow the import of sugar, cotton and cotton yarn from India through land and sea routes has irked the textile sector.
The sector is, therefore, planning a mass demonstration in the coming days to express their disapproval.
The textile export sector has been demanding duty free import of cotton yarn from all over the world, including India, to protect the industry from any big loss. PM’s Advisor on Commerce and Investment Abdul Razak Dawood on Monday was granted approval to import cotton yarn through land route (including India) to tackle the domestic shortfall and bring down the prices in the domestic market.
According to Dawood, a meeting was held with the prime minister where rising prices of the cotton were discussed. PM Khan was concerned about the value-added sector and said that it was necessary to allow import of cotton from India to ease the pressure on yarn and maintain the momentum of cotton exports.
The import of these raw materials was expected to lead to a revival of the trade relations between the two neighbors which had deteriorated in August 2019 when India revoked Article 370 of its constitution that granted occupied Kashmir a special status.
However, the decision on the summaries submitted to the ECC seeking permission to allow the import of white sugar and cotton from India via relevant channels was deferred by the cabinet. The cabinet clearly stated that no trade can take place between the two countries until India reinstates Article 370 of its Constitution, which guarantees a semi-autonomous status for Indian-occupied Kashmir.
Pakistan Apparel Forum chairman Jawed Bilwani on Thursday said the cabinet’s rejected of the ECC’s proposal has disappointed the textile sector. It would convey a negative message to foreign buyers as cotton yarn was not available in the country, he added.
According to Bilwani, the prices of cotton yarn have peaked after the cabinet’s decision and the government should now ensure its availability in the country if it does not want to allow its import from India.
Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Patron-in-Chief Ijaz Khokhar also opposed the federal cabinet’s decision saying that according to the World Trade Organisation (WTO) laws, no one can object to trade with another country and if Pakistan can import medicine from India, then why not cotton.
All Pakistan Textile Mills Association on the other hand, has welcomed the decision.
Speaking to GVS, Senior Executive APTMA, Saad Umar had said that the association was not exactly against the import of cotton from India but it believed that it should not be done at the cost of the domestic industry.
Pakistan would import cotton from India at subsidized rates which would prove disastrous for the domestic producers, said Umar. The government should instead undertake measures to support the local industry so that it is able to provide yarn at affordable prices, he added.
If the cotton yarn is imported at low prices from India, the demand for local yarn will decrease and the prices will fall and this would have dire consequences for the small businesses, he had warned.
Umar further stated that since the Pulwama incident the political situation has not been conducive for imports and though Pakistan is keen on resuming bilateral trade with India, no favorable response has been received from the latter as yet.
According to APTMA, the cotton sowing season is currently starting in Pakistan and the predicted drop in cotton price owing to import of yarn from India is approximately 10-15%, dissuading farmers to not sow cotton.