Pakistan has imposed regulatory duty on yarn imports. Yarn traders say the current duty structure of yarn should be maintained and no duty should be levied on imports of yarn. They say that as a result of the regulatory duty yarn manufacturers would increase their prices according to the landed cost of imported yarn and as a result the price of finished textile products would also increase and have a double impact on inflation.

They say yarn manufacturers should not be allowed to capture the market with their low quality and high cost of production despite the huge difference in duty structure.Traders feel that instead of imposing the regulatory duty, efforts should be made to increase effective production capacity.

Pakistan is an importer of polyester filament yarn which is the main raw material in textiles because yarn is not a finished product. Cotton has been replaced by yarn and the textile industry in Pakistan is largely dependent on imported yarn.Pakistan’s textile and apparel industry is the backbone of the economy, constituting eight percent of GDP, 40 percent of the industrial labour force and more than 60 percent of the country’s exports while its manufacturing share is 46 percent.