PRGMEA wants duty-free fabric import from across world

Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA), supporting the Prime Minister's stand of 'no trade with India' under current circumstances, reiterated its demand of allowing duty-free import of fabric from across the world to overcome local shortage, as the fabric in Pakistan is being sold at $2.5 against rate of $1.5 in China.

PRGMEA north zone chief and vice chairman Adeeb Iqbal Shikeh, stressing the need for duty-free fabric import to encourage value-addition, suggested the government to review its textile policy to remove hurdles hindering exports and to enable the textile sector to attain the exports targets.

Garment industry fully supports the government to continue halting all types of trade with India until it revisit its unilateral and illegal measures of August 5, 2019 regarding held Kashmir. We also appreciates the prime minister for instructing the Ministry of Commerce and his economic team to immediately take steps to facilitate the relevant sectors, value added apparel, by finding alternative cheap sources of import of the needed commodities, he added. There is also need to take strong action against textile mafia who are hoarding a huge stock to create artificial shortage to make money in line with the action taken against sugar cartel.

"We urge the government to abolish all duties on the import of fabrics, as valueadded garment sector is facing severe shortage of basic raw material of fabrics, which may lead to a drastic decline in value-added textile export. We also want duty-free import of fabric," he added. He said that cotton prices have fallen by Rs400 to Rs10,800 per maund while no cut in fabric prices have been seen so far in spite of declining trend in global market.

"We appeal the government to withdraw all types of duties and taxes on fabric import following abolishment of Customs and Regulatory duty on yarn in view of controlling shortage of apparel industry's raw material."

He said that another important issue which has been hitting the exporters hard is the astute depreciation of dollar against rupee, because the garment exporters had booked their annual orders for the global buyers at the rate of Rs.167 per dollar, which has now nosedived to Rs153. The garment exporters are facing financial crunch, since their cost has increased because of dollar depreciation against rupee from 167 to 153 and increase in prices of cotton yarn by more than 40 percent, he said.

"PRGMEA appreciates the efforts of Adviser to PM on Commerce and Investment Abdul Razak Dawood for presenting our demand before the ECC and hope the Cabinet will also approve it at the earliest," said PRGMEA Central chairman Sohail Sheikh and chief coordinator Ijaz Khokhar.

Sohail Sheikh said that the government's earlier decision of withdrawing five per cent regulatory duty in Dec 2020 on the import of cotton yarn and now removal of customs duty will greatly support the textile sector and contribute to the country's economic stability.

"This is not an ideal situation, especially at a time when the exporters are facing financial crunch in the wake of 700 percent jump in sea freight charges and sharp depreciation of dollar against rupee, yet it would provide some cushion to the apparel sector, which is suffering a huge shortage of industry raw material, observed Ijaz

Khokhar. "We still thinks that the real solution of raw material shortage lies in opening of import through land route, as cotton yarn import via sea can never become the substitute of extremely low-cost yarn arrived via land route particularly in the wake of exorbitant hike in freight rates of shipping lines," he added.

He asked the government that this relaxation of customs duty on yarn import should not be limited to just three months rather it should continue until the country is capable of meeting textile value-added industry's demand of 10 million cotton bales. If this relief is withdrawn after June 2021 amidst shortage of cotton the export growth will be affected severely, which should be avoided at any cost, he said.

The PRGMEA leadership also reiterated its demand to the Prime Minister to pass directives for the forensic audit of the yarn producers to break cartel of cotton mafia.

They said that the Imran Khan government will have to take serious steps to break the textile industry cartel, giving it strong message that no cartelization would be allowed to manipulate prices in future and if they commit such crime they have to face the full brunt of law.