All Pakistan Textile Mills Association (APTMA) has requested the federal government to bring down import duty on polyester staple fibers to zero percent to revive local industry, well-informed sources in Textile Division told Business Recorder.
According to the Association, domestic textile industry is facing existential threat due to the negative cascading of import duties on the polyester staple fiber chain.
The world over demand for textile yarns is over 85 million tons, of which demand for cotton yarn is 22 million tons while remaining demand is being met by manmade or semi-synthetic yarn, chiefly polyester, which accounts for over 60 million tons. The normal consensus is that 70 percent of the incremental demand for yarn during the coming years will be met by polyester.
In Pakistan, the duty structure for the last 20 years has been such which has crippled the domestic spinning and weaving industry.
Pakistan only produces normal (generic) polyester staple fiber of semi-dull and bright type in deniers of 0.8 and 1.4.
All other types like anti-bacterial, moisture management properties, copolymer polyesters, cationic dyeable polyester staple, and polyester with cross section moisture management through capillary action solution dyed polyester with or without UV protection are not produced locally.
APTMA's Pattern-in-Chief Gohar Ijaz is of the view that the import duty on polyester staple fiber is 7 percent which increases to 9.8-18.51% with the addition of anti-dumping duty imposed since October 05, 2015. The import duty on yarn and woven cloth is 11.0% and 16% respectively.
He further argues that the imposition of high import duty, compounded with anti-dumping duty, has rendered domestic textile industry uncompetitive, as domestic PSF producers are pricing their product after adding the impact of import duty and anti-dumping duty. "This negative protection has rendered the domestic industry uncompetitive not only in domestic market, but also due to high domestic prices of PSF, which since January 2018 have risen from Rs 148/kg to Rs 192/kg; our exports are negligible and are at the lowest tier of value addition chain," he said.
"The irony of the situation is that the domestic industry has to bear the whole cost of protection and antidumping in case of exports as we cannot charge importers in the world market, additional cost of protection to the upstream industry, whether at yarn, fabric or made-up stage," he further said. There is no regime for duty drawback and the whole cost of duty protection to PSF, i.e, 7 percent is absorbed by the Pakistani textile exporters at various stages. Though the DTRE scheme exists, it is practically nonviable.
"We need a simple indirect exports procedure to be considered for the textile units, which are spinning polyester to make use of the DTRE scheme," Gohar Ijaz said, adding that import duty on polyester staple fibers be reduced to zero so that local textile industry gets revived and is able to make its contribution to the national's economy and provide employment by competing with the imported yarns and is also able to get its share in the export market.
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