Pakistan’s textile industry, which is the largest manufacturing industry in the country and contributes about 8 per cent to its GDP, is becoming “unviable” in terms of export of yarn and fabric, All Pakistan Textile Mills Association (APTMA) chairman, S.M.Tanveer said.
The industry growth has become stagnant due to non-diversification since long. He further highlighted that the world dependence on Polyester is around 70 per cent at present against merely 19 per cent in Pakistan. This situation has made it difficult for local industry to find place in the world market.
Six per cent import duty on polyester staple fiber (PSF) has ruined the textile industry as it has become uncompetitive when incidental charges are added to the import duty. Resultantly, textile exports from Pakistan have become 18 per cent more expensive against the regional competitors due to higher domestic Polyester Fibre price. The regional competitors are offering duty drawbacks besides rebate to their textile industries.
Unlike India, China, Bangladesh and other competitors, there is also no duty drawback for industry in Pakistan, as a result, the import of PSF yarns into Pakistan has also started in huge quantities. So far during the first ten months of the current fiscal year over 38,000 Tons of man-made fibre yarn has been imported from Far East and India.
In China, the FOB price for PSF is 70.1 Yuan/kg (U.S $ 1.13/Kg.) whereas in Pakistan it is Rs.137/Kg. ($1.34 /Kg).This difference is further compounded by the higher cost of doing business.
The 8th largest textile exporter of Asia, thus, finds the import duty on PSF detrimental to its textile industry, Tanveer said.
