The textile sector in Pakistan wants the four per cent incentive (duty drawback of taxes) on yarn exports to be withdrawn immediately. The textile community says this is necessary since global competition has become tougher and competitors like China and Bangladesh are getting Pakistani yarn at four per cent less cost.

It says manufacturing (stitching) units should be allowed to import yarn, their prime raw material, easily at international prices without any bottlenecks. As of now they are not allowed to import yarn. The value added textile sector in Pakistan contributes 53 per cent of total exports and 89 per cent of total textile exports and generates 42 per cent of total employment.

Globally, there is no duty on import of raw material and duty is always on exports. China and Bangladesh discourage export of raw material and encourage value addition, which is their key to success. However, in Pakistan the situation is the opposite and exporters want this rectified.

Exports of value-added textile sector in Pakistan rose in the first seven months of the fiscal year 2016-17. An incentive package worth Rs 180 billion is being offered to export-oriented sectors, mainly textiles, which accounts for more than half of the annual exports from the country. The package comprises withdrawal and concessions on customs duty and sales tax on import of cotton and machinery.