Businessmen, industry concerned over decision to reject low-cost yarn import from India

ISLAMABAD-Business community and apparel industry has expressed concerns over the federal cabinet’s decision to reject low-cost yarn import from India. 

Chairman of National Business Group of FPCCI and president Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, Zahid Hussain on Friday said Cabinet’s decision to turndown Economic Coordination Council’s move to allow the import of cotton and cotton yarn from India through land and sea routes has created uncertainty in the largest export earning sector of textiles. 

The decision has attracted criticism from industrial sector and raised questions about the future of textile industry and the flawed decision-making process of the government, he said.  Mian Zahid Hussain said that the development suggests that top government functionaries are not on the same page regarding issues of paramount importance.  Talking to the business community, the veteran business leader said that the suggestion of Commerce Advisor Abdul Razzaq Dawood and textile sector to allow the import of cotton and yarn from India was according to the ground realities and national interests. 

The latest development will support the stance of economic experts and opposition that government lacks ability and the will to reform the economy and their decision will encourage profiteers to increase prices which will contribute to the closure of many mills. 

Exports orders will be compromised while foreign buyers will prefer other countries over Pakistan as they would not like to conduct business with a country facing a shortage of cotton and yarn as the local cotton production has reduced by 50 percent as compared to 2014-15.  The price of cotton and yarn is increasing after the decision of the federal cabinet as the value-added sector has asked for imports from India or ban on the export of local cotton and yarn but none of the demand has been accepted. 

Meanwhile, value-added export-oriented apparel sector has shown its disappointment over the Cabinet’s rejection of Economic Coordination Committee of the Parliament’s decision to allow the import of low cost cotton yarn from India through land route of Wagha. 

The textile and apparel export sectors, which are already under pressure due to the corona pandemic third wave, have been continuously demanding duty-free import of cotton yarn from all over the world, including India, to avert any big loss and continue employment generation, said PRGMEA central chairman Sohail Sheikh and chief coordinator Ijaz Khokhar. 

Terming PM Advisor on Commerce Investment Abdul Razak Dawood’s recommendation to allow import of cotton yarn from India as realistic, they said that the Cabinet must accord serious consideration to the proposal.  Sohail Sheikh requested to the federal cabinet to allow import of low cost cotton and yarn from India through Wagha land route. He asked the Prime Minister Imran Khan and his team to take this bold decision which is vital for the smooth running of the industry. He said that the decision to lift the ban on import of cotton and yarn from India will greatly support the country’s value-added knitwear sector, besides contributing towards stabilizing the national economy.  He said that local production of cotton was not sufficient to meet the domestic demand of the textile and apparel Industry. Hence, the PRGMEA suggests the cabinet to allow duty-free import of yarn from India so that exporters could achieve their production targets. 

He said that it was most crucial to allow import of cotton yarn from neighbouring country through Wagah border as the quality yarn is not available and prices are also multiplied to manifolds.  He demanded that the government to also abolish all duties and taxes on import of cotton yarn from everywhere, as it is the raw material of value-added apparel sector to sustain exports.  Ijaz Khokhar said the rejection by the country’s cabinet of the Economic Coordination Committee’s (ECC) proposal would convey a negative message to foreign buyers as the cotton yarn was not available in the country. 

Sohail Sheikh said the duty-free yarn import through land route will be positive for the apparel industry to convert imported yarn into value-added goods, exporting them to the international market instead of raw cotton yarn.

Article source: https://nation.com.pk/03-Apr-2021/businessmen-industry-concerned-over-decision-to-reject-low-cost-yarn-import-from-india