ISLAMABAD: The Ministry of Textile Industry on Monday sought permission from the Economic Coordination Committee of the cabinet to lift ban on import of cotton and cotton yarn from India in a bid bridge raw material shortfall for the value-added textile sector, Dawn has learnt from official sources.

The import of these raw materials will lead to partial revival of trade relations with India since August 2019 when Pakistan formally downgraded its trade relations. The low yield cotton bales in the country has paved the way for import from India.

“We already submitted the summary to the ECC more than a week ago to lift the ban,” an official said, adding the decision of the coordination committee will then be placed before the federal cabinet for formal approval.

The government’s decision to consider lifting of ban from India came as a big relief for the value-added textile sector which seeks access to cheap raw materials.

Currently, cotton and yarn imports are allowed from all countries except India.

Prime Minister Imran Khan, as incharge of commerce and textile ministry, has already approved the summary to be placed before the ECC.

On Aug 9, 2019 Pakistan downgraded trade relations with India in reaction to the latter’s decision to revoke Article 370 of its constitution that granted occupied Kashmir a special status. Bilateral trade remained suspended since then.

In May 2020, Pakistan lifted the ban on import of medicines and raw material from India to ensure there is no shortage of essential drugs amid the Covid-19 pandemic. This was the first step of reversing of complete suspension of trade with India.

Taking to Twitter, Commerce Adviser Razak Dawood tweeted, “A meeting was held with the Prime Minister @ImranKhanPTI escalating prices of cotton yarn were discussed. He was sympathetic towards the value-added sectors & advised that in order to ease the pressure on yarn and keep momentum of value added exports.”

“All steps be taken through cross-border imports of cotton yarn including by land. A summary will be presented at the next ECC to ensure availability of cotton and yarn in the coming months,” the commerce adviser said in another tweet.

Exporters appreciate move

Meanwhile, the value-added textile sector hailed the government’s move. Appreciating the decision, the All Pakistan Textile Exporters Association further urged the federal government to ensure energy supply to entire textile value chain at upfront tariff, gas $6.50/mmBtu and electricity at $ 0.075/Kwh if it wished to continue the momentum of textile exports.

It has been observed that prices of fabric are going up on daily basis despite fact that all looms working and making lot cotton fleece, he added.

Pakistan Textile Exporters Association Chairman Khurram Mukhtar in a tweet said that import of raw cotton, yarn and grey fabric from India will bridge the gap in demand and supply. It will enable Pakistani exporters to continue growth momentum, he said.

Currently hoarding of raw materials and speculation are at peak, Mr Mukhtar said.

Pakistan’s exports to India plunged 89 per cent to $2.085 million this year from $19.738m in the 8MFY20. Exports to India plunged by a whopping 90.8pc to $28.644m in FY20 from $311.958m over FY19.

Published in Dawn, March 30th, 2021*