Pakistan’s hosiery manufacturers and exporters are facing import restrictions. They are not allowed to make advance payments without bank guarantees from suppliers abroad. Generally, exporters import trims and accessories from buyers' nominated foreign suppliers through advance payments because foreign suppliers only start working after receiving the advance payment.

Export oriented units have to abide by buyers' requirements otherwise future orders would not be placed. Exporters want the provision withdrawn and say it would hinder the smooth process of future export orders, leading to a decline in foreign inflows. They say the withdrawal of advance payment facility will curtail imports for domestic needs. Pakistan is facing a huge trade deficit.

There are about 13,372 circular knitting machines, 10,646 flat knitting and 23,241 socks knitting machines in the country. Capacity utilization is around 70 per cent. Pakistan’s value added textiles in general and the apparel export sector in particular are under severe pressure due to hard competition in the international market being faced from competing countries like Bangladesh, Vietnam and Cambodia.

The new rule has withdrawn the facility extended to manufacturers to import even basic raw materials used in export items on advance payments up to 100 per cent of the value of the goods.