Discriminatory policies affects weaving sector in Pakistan

Pakistani weaving sector, due to the discriminative policies of the government are suffering and almost on the verge of collapse, especially indirect traders who supply goods to the exporters.

According to Asif Siddiq, founding member and patron-in-chief of Pakistan Weaving Mills Association, exporters have been allowed to import yarn at zero percent duty and no income tax and sales tax while the indirect exporters have to pay 15 percent custom duty and one percent income tax.

With this kind of policy, government has completely taken the indirect exporters out of the market. In other words, all trading activity, which is the backbone of any industry, has come to a halt and now all weavers are on the mercy of the exporters to get the yarn from them and only run their machines on overhead basis.

The weaving industry due to the shortage of cotton in Pakistan and high input cost is relying mostly on imported yarn from India, China, Indonesia, and Turkey.

Pakistani textiles were unable to compete with India and Bangladesh due to the high input cost, which was obvious as Indian cotton prices were more than Pakistan’s but the Indian yarn prices were cheaper by 5.0 to 10 percent.

The government needs to immediately make an even playing field for the direct and indirect exporters and consult all the stakeholders before making policies of this sort to safeguard the industry.

The textile package which was to be announced by the government should address the issue raised by Pakistan Weaving Mills Association.