Call To Abolish Duty On Import Of Raw Cotton

Call To Abolish Duty On Import Of Raw Cotton
Acting President of Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Sheikh Khalid Tawab has urged Federal Finance Minister Senator Ishaq Dar and Chairman Federal Board of Revenue (FBR) Nisar Muhammad Khan to immediately abolish the duty on import of raw cotton which had been increased to three percent from two percent vide Finance Act, 2016 as well as additional duty levied at on percent vide SRO 1178(I)/2015 dated November 30, 2015, thus increasing the total incidence of duties to four percent.
Khalid Tawab argued that the raw cotton was a basic raw material of cotton spinning industry and constitutes about 70 percent of the total cost of production. He recalled that Pakistan was one of the largest cotton producer countries in the world and cotton textile industry contributed a lion share in the total export to the tune of about 60 percent to 65 percent; provided employment opportunities to about 40 percent of the industrial labor force and its share in GDP was eight percent. However, due to indigenous cotton crop failure in 2014-15 its production was declined by almost 35 percent thus slashing the growth rate by about 0.5 percent.
Moreover, he said that cultivation of cotton in 2016-17 was also expected to decline by about 25 percent which will ultimately decline the availability of cotton to the spinning industry compelling it to import the shortfall of over three million bales at four percent duties to keep the production wheel moving and to meet export orders well in time and avoid default from meeting orders.
Sheikh Khalid Tawab lamented in this scenario, instead of providing relief to the cotton textile industry, the government had increased the duty, thus eroding the competitive edge of our textile products in the global market. Acting President of FPCCI said the industry was already suffering from the high cost of doing business and acute shortage of energy in the country and now even had to compete with a surge in cost of cotton yarn imports, from its regional competitors, besides meeting the adverse effect of UK exit from EU in the wake of GSP Plus status granted to Pakistan.