Pakistan Readymade Garments Manufacturers and Exporters Association demands to abolish additional regulatory duty on cotton yarn

Karachi, July 19, 2016 (PPI-OT):Shaikh Mohammad Shafiq, central chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) in a statement said that the exports fell by 12.11% from $23.667 billion to $20.802 billion in the fiscal year 2015 – 2016. The imports increased by 2.27%, standing at $4.467 billion in June 2016 compared to $4.368 billion in June 2015.

In the recently announced budget for 2016-17, the Finance Ministry gave some incentives of rebate and zero-rated sales tax to top five important textile sectors to enhance their exports in the next two years, but surge in yarn prices by almost 25% has hit the apparel sector badly. Cotton yarn prices have increased by around 25% to Rs11500 per bag of 100 pounds from Rs 9950 during the last one and a half months due to cartelization of local manufacturers who are taking advantage of 10% additional regulatory duty on import of yarn.

He demands the government to abolish additional regulatory duty on cotton yarn that should be imported freely from anywhere, as it is hitting the whole value-added apparel sector especially due to limited availability of cotton which is being exported without any hindrance. He further said that value added industry is already suffering with the low productivity due to shortage of cotton, high energy cost, and discriminating import duties on the industry’s raw material.

Textile sector is aggrieved of the demand for the payment of Cotton Cess purportedly levied in terms of Cotton Cess Act, 1923 read with Cotton Cess Rules, 2012. Vide SRO 832(I)/2012 the demand of Cotton Cess was enhanced from Rs. 20 to Rs. 50 Per Bale on imported and local cotton. It is clearly evident that the cotton research institute under the supervision of PCCC (Pakistan Central Cotton Committee) has miserably failed in the sustainability of the crop.

The PRGMEA chairman said that regional comparison of cost of doing business shows that Pakistan’s wages, interest rates, electricity, gas and water tariff are much higher and have created hurdles for smooth business. Despite certain hurdles, the business community engaged with value added industry was making strenuous efforts for enhancing the export in the larger national interests.

In a statement, Shafiq, pointed out that Pakistan’s major competitors such as India, BD and China were utilizing all the channels and resources for capturing the world market.”Under the prevailing situation we need to opt for similar approach to survive well in the market”.

For more information, contact:
Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA)
3rd Floor, Plot No. 57-C, 24th Commercial Street,
Phase II (Ext), DHA, Karachi, Pakistan
Tel: +92-21-35890651-2
Fax: +92-21-35890653
Email: info@prgmea.org
Website: www.prgmea.org