The textile sector in Pakistan is under pressure. An unprecedented cotton crop failure caused a 35 per cent drop in production this year. For the first nine months, only 30 per cent of listed textile companies performed marginally well while 70 per cent showed closure or negative results.

Textile units say the input cost of cotton farmers should be reduced to encourage cotton production. Also, they want the funding provided by the textile industry for cotton research to be spent on cottonseed technology.

Another suggestion is that the whole textile value chain should be zero rated in the Budget as over 80 per cent of all fibers consumed are exported in one form or another. They say only the consumption of finished textile fabrics and garments for domestic consumption should be taxed. Also the import of synthetic specialty fibers including viscose and acrylic should be zero rated to undertake product and market diversification.

They also want a 15 per cent regulatory duty imposed on subsidised and imports of synthetic yarns and fabrics. Sales tax refunds should be released and sales and import duty on cotton imports should be withdrawn. They say if all this is not done Pakistan’s industry will not be able to match up to competitors like Bangladesh and Vietnam.