The weaving sector, particularly parties which supply goods to exporters for being shipped abroad, are almost on the verge of collapse due to government policies, a leading business said on Friday. Addressing an extraordinary general meeting of the Pakistan Weaving Mills Association, Asif Siddiq, a founding member of the PWMA, said exporters have been allowed to import yarn without duty or income tax and sales tax.

On the other hand, he added, indirect exporters have to pay a 15 percent customs duty and one percent income tax on import of yarn. Due to the shortage of cotton in Pakistan and the high input cost, the weaving industry is relying mostly on imported yarn from India, China, Indonesia and Turkey, he added. "With this kind of policy, the government has taken the indirect exporters out of the market.

In other words, all trading activities have come to a halt and now all weavers are at the mercy of the exporters to get yarn from them", he said. In addition to this, the financially weak exporters who were relying on traders and indirect exporters to provide them fabric, are going out of business. The government needs to deal with the direct and indirect exporters in an even-handed way and consult all the stakeholders before making policies.

Asif Siddiq said the textile package about to be announced by the government should address this issue. At the same time, he demanded, the government should immediately release sales tax refunds so that the textile sector can come out of its financial crisis, which he attributed to delays in the payment of refunds. Asif Siddiq requested the federal minister for textiles to intervene on behalf of the weaving sector, the biggest export sector in Pakistan.

Copyright Business Recorder, 2017