Pakistan is likely to allow the textile industry to import cotton to meet its requirements. The industry wants the four per cent customs duty and five per cent sales tax and other non-tariff restrictions on import of cotton to be withdrawn so as to enable the industry to meet its export commitments.
Restrictions on import of cotton from India and Brazil have already spiked the price of local cotton to above Rs 7000 per maund as the country is going to harvest a short crop for the fourth consecutive year. In comparison, Indian cotton is available at around Rs 6000 per maund. Pakistan’s cotton production is estimated to be around 12.6 million bales for 2017-18. Cotton prices in Pakistan will remain on the higher side due to the growing demand for the commodity by textile and spinning sectors and higher costs of imports.
The textile industry is the backbone of Pakistan's economy. It contributes more than a 61 per cent share in the country's exports and is the largest foreign exchange earner and employment generator. The textile sector has been a major beneficiary of GSP Plus. Pakistan’s exports of textiles have increased by 55 per cent in value terms in 2016 over 2013.