Yarn manufacturers in Pakistan are accused of having formed a cartel across the country. Yarn rates have gone up to Rs 1,200 per 100 pounds bag from Rs 800 since the imposition of 10 per cent R&D on import of yarn and fabric, a hike of 50 per cent in a week.

Though the implementation of another 10 per cent duty on yarn would start from the next month, even the consignments booked in advance are being blocked, while local manufacturers have directed their dealers to stop floating new orders till the imposition of the additional tax.

Pakistan’s spinning sector makes a value addition of 59 per cent, while the performance of value addition by the woven garment sector is 846 per cent and hosiery and knitwear garments 616 per cent. The country’s exports have declined from 10 per cent in August 2015 to four per cent in September 2015.

The apparel sector already has a very limited production line owing to lack of latest fabric varieties at the local level. The harsh duties would result in a significant decline in apparel exports. Non-utilisation of cheap raw material from China and India will force foreign buyers to move to neighboring countries.