APTMA said that the government policy of promoting use of Indian fabric and yarn by value-added textile sector is hurting the industry.
Restrictions on import of cotton from Brazil and India has spiked the price of local cotton above Rs7,000 per maund as compared to Indian cotton which is available at around Rs6,000 per maund due to which the textile industry is becoming unviable.
Import is affecting international competitiveness because of the higher raw material import prices.
Government is charging 5% sales tax and 4% customs duty on imported cotton in addition to 1% advance income tax. An unannounced ban on import of cheaper cotton has also been placed by the government via Wagah using non-tariff barriers.
Mr Aamir Fayyaz, Aptma chairman said, “While cotton import is banned or restricted, you can freely import duty-free yarn and fabric from India and claim 6-7pc rebate that should principally be available only on export of made-ups and garments made from indigenous raw materials.
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It is a wrong government policy to allow yarn and fabric from India in ‘bond duty free’ and ban Indian cotton in ‘bond for exports’.
APTMA has urged government to immediately withdraw non-tariff curbs on import of cotton from India and Brazil.
The factories in Punjab direly require contamination-free, fine and medium staple cotton to produce quality goods for domestic and global markets.
