Customs duty on yarn import removed

ISLAMABAD: The Cabinet Committee on Textile has removed customs duty on import of cotton yarn falling under Chapter 52 of the Harmonised Tariff Schedule with immediate effect, and decided to take corrective measures if yarn export exceeds 50 million kg per month.

The second meeting of the committee, which was presided over by Federal Minister for Textile Industry Rana Mohammad Farooq Saeed Khan here on Wednesday, observed that due to cotton failure at the international markets yarn prices had increased globally. ‘However, if the mid-stream textile sector finds feasible it can import yarn even from India.’


A textile ministry official informed the committee that the yarn production was expected to be around 2.6 million tons this season and a check on its exports could bring down yarn prices in the local market.

The meeting was informed that there was a need to provide a level-playing field to all stakeholders in the textile chain and the requirements of all the sectors should be fulfilled in a competitive manner.

The meeting observed that around 300 tons yarn had been exported mainly to China in the first five months (July-Nov) of 2009-10.

It also reviewed the production, prices and domestic availability of cotton yarn in the wake of rising complaints of shortage by the textile sector due to massive exports.

Secretary Textile Industry Dr Waqar Masood Khan briefed the meeting on the production trend, exports and availability of yarn for the value-added textile sector.

Based on the suggestions of the finance ministry that yarn exports should be utilised as a platform for ensuring foreign exchange inflows in the country, the meeting decided that yarn exports would be allowed only against LCs and advance cash received through normal banking channels.’ Yarn exports based on credits will not be allowed and contracts will have to be registered with the Trade Development Authority of Pakistan (TDAP),’ the textile minister declared.

The next meeting of the committee would be held on January 8, 2010.

The meeting was attended by Federal Minister for Food and Agriculture Nazar Muhammad Gondal, State Minister for Finance Hina Rabani Khar, Secretary Ministry of Commerce Zafar Mahmood, Secretary Industries and Production Abdul Ghaffar Soomro, Secretary Food and Agriculture Muhammad Zia-ur-Rehman, Secretary Investment Muhammad Saleem Khan, Secretary Industries Government of Punjab Rao Manzar Hayat, Member Planning Commission Dr S.M. Younus, Member Customs FBR Munir Qureshi, Joint Secretary Ministry of Finance Ahmed Hussain, Commissioner Faisalabad Tahir Hussain and Chief Executive TDAP Mohibullah Shah and officers of ministry of textile industry.