Khurram Mukhtar, Patron-in-Chief of Pakistan Textile Export Association (PTEA) raised the general concerns over undue delay in disbursement of exporters’ Duty Drawback of Taxes and Income Tax refunds (over Rs. 50 million). He also urged the Government to take immediate measures to ease the financial stress and gear up the export growth.
Textile exporters are facing severe problems in meeting export demands. There is a drop in yarn production, but the textile industry’s demands have increased. The gap between supply and demand has put pressure on textile exporters who are already facing a severe financial crisis for non-payment of Rs330 billion in income tax refund and duty drawback taxes.
Mr. Mukhtar said that yarn had a 60 percent drop in its production this year while there was a 25 percent increase in the textile industry demand. This gap has led to a shortage of cotton yarn in the market and resulted in an immense increase in the thread price.
Low cotton productivity and a ban on cross-border cotton imports have spiked cotton yarn, and textile exporters are forced to pay a higher price for raw materials. He appreciated Prime Minister Imran Khan for taking severe notice of cotton shortage and allowing the import from Afghanistan and the Central Asian States via the Torkham land route; however, he considered it insufficient to meet the apparel industry’s raw material needs as importing yarn from central Asian countries is not only expensive but will take one to two months to reach Pakistan. In order to overcome the scarcity of primary raw material, he demanded a cross-border import of cotton yarn from India to ensure continuity in export growth
Vice-Chairman of PTEA Saqib Majeed believed that undue delay in Textile Policy’s approval results in deferral or even backing out of investors from possible investments in the textile chain. Implementation of textile policy would attract domestic and foreign investment in the textile value chain and the development of value-added sectors. He demanded immediate approval and implementation of textile policy to pick-up the textile value chain’s growth pace.
