Govt increases duty on Cotton import from 2% to 3%

KARACHI: The government has further increased the custom duty on cotton import from 2 per cent to 3 per cent, while the industry has to pay a total 4 per cent duty on cotton imports, said Tariq Saud, chairman APTMA here on Friday.

APTMA has expressed great concern over the callous attitude of the Nawaz Sharif’s government that increases custom duty on import of raw cotton from 2 per cent to 3 per cent which along with the additional duty of 1 per cent has increased the incidence of total import duty to 4 per cent.

This at a time when the textile industry is reeling from the effects of a total crop failure as the production of cotton in the year 2015-16 has declined by almost 35 per cent. Furthermore, cultivation of cotton this year is expected to decline by approximately 25 percent which will ultimately decline the availability of cotton to the spinning industry compelling them to import cotton at 4 percent custom duty.

Tariq Saud, Chairman APTMA said that APTMA has been pleading with the government to totally remove import duty on cotton so that the textile industry can operate in an efficient manner. But instead of accepting reality, they have chosen to increase duty and further exacerbate the industry’s plight, he added.

He further said that it is not possible for the textile industry to continue to operate in these conditions and contribute to higher exports and provision of yarn to the domestic downstream if they are made to pay such exorbitant amount of duty on its basic raw material.

Pakistan has become a net importer of raw cotton and even then the textile industry is trying to remain competitive while contributing to the national exchequer as well provide millions of jobs, he added. But if we have to import over 4 million bales due to crop failures then import duty MUST be abolished, he added.

Chairman APTMA said that the government must take account of the situation immediately and abolish all duties and taxes on import of raw cotton. The industry is already suffering due to high cost of doing business and shortage of energy in the country and now even has to compete with a surge in cotton yarn imports from its regional competitors.

Chairman APTMA further said that cotton is one of the basic raw materials of Textile Spinning Industry and constitutes around 70 per cent of raw material cost. The government in the Federal Budget 2016-17 has further increased Custom Duty by 1 per cent that is 2 per cent to 3 per cent and has kept the Additional Duty of 1 per cent intact in the Federal Budget 2016-17, thus total duty become 4 per cent which makes the basic raw material more expensive and it made the domestic industry unable to compete in the international as well as domestic market which can be confirmed from the fact that during the last Financial Year the imports of cotton yarn has almost doubled as compared with 2014-15.


He urged the government to allow import of cotton free of all duty and taxes till the production of cotton matches with the consumption requirement of the domestic spinning industry.

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