Pakistan wants to discourage import of cotton yarn from India. And in a bid to curb imports it may impose 5 per cent customs duty on Indian cotton. Different stakeholders in Pakistan have expressed serious reservations over the unrestricted import from India. They say, the Indian government has increased its subsidies on textile products, especially, on yarn and that India is providing other incentives such as duty drawback and technology upgradation fund to subsidise its products. Since cotton yarn imported from India is 15 to 20 per cent lower than local market rates, this is hurting the local industry. 

Their main grouse is that India has not provided a level playing field to Pakistani exports, especially in the textile sector. Pakistan imported 5,223,129 kg of cotton yarn in three months whereas the imports from India were 4,220,893 kg. For imports of 345,070 kg of single carded-8 cotton yarn, imports from India stood at 326,589 kg in three months. For imports of 557,510 kg of single carded 8-25 the Indian share remained at 470,998 kg. The country imported 1,395,570 kg of single combed (71 and above) while the import share from India remained at 1,308,813 kg.