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Pakistan: APTMA Seeks Zero Duty on Polyester Fiber Imports

The All Pakistan Textile Mills Association (APTMA) has asked the Pakistan government to lower the import duty on polyester staple fiber (PSF) to zero so that the country can diversify its predominantly cotton-based sector.

APTMA acting chairman Wisal Monnoo said all imports of specialty fibers, including acrylic, should be allowed to enter Pakistan duty free, and imports of viscose staple fiber, which is not currently manufactured in the country, should also benefit from zero percent customs duty.

“The country’s textile industry is unable to compete in man-made fiber (MMF) textile and clothing products owing to the protection extended to local PSF,” Monnoo said in a statement. “Presently, 6 percent customs duty and import incidental together with local PSF manufacturers’ margin make PSF available at around 20 percent price differential.”

In Pakistan, the country’s textile mix skews more heavily cotton—80 percent cotton versus 20 percent man-made, compared to the global trend, which is closer to 70 percent man-made fibers and 30 percent cotton—and any duty on the polyester fiber APTMA says will hinder the company’s opportunity to diversify its products and markets.

“The textile industry is still unable to produce exportable surplus, in particular MMF-based textile products, to benefit from enormous opportunities under GSP+ of export of synthetic based textile products,” Monnoo explained.

Increasing the customs duty on polyester fiber would not only make the export-led textile goods unviable, according to Monnoo, it would also make poly-based textile goods for domestic consumption unaffordable.

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The high duties on polyester prices have already contributed to fabric and synthetic yarn smuggling in the domestic market, Monnoo said.

India is also struggling with duties on its man-made fiber imports.

Imports of man-made yarns, namely polyester, have increased 20 percent in 2014-15 over the previous year, and the imports are predominantly from China, according to chairman of the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) Anil Rajvanshi. India imported $825 million worth of fibers, filament and spun yarn in the 2014-15 season, as well as $780 million in fabric imports.

At present, synthetic fibers coming into India face a 12.5% excise duty, whereas cotton imports aren’t taxed at all.

In a letter to India’s textile minister Santosh Kumar Gangwar, Rajvanshi said, “This has fragmented and weakened the industry. You have to save this industry or else we will not be able to sustain and give way to countries like China, Vietnam and Bangladesh to march past India,” the Times of India reported.