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LAHORE: Cotton industry is facing mounting pressure amid allegations that large quantities of fabric imported from China under the Export Facilitation Scheme (EFS) are being diverted to the open market after under-invoicing while widespread rains and looming floods threaten to inflict fresh damage on the standing cotton crop.
Cotton Ginners Forum Chairman Ihsanul Haq warned on Sunday that the industry, already grappling with declining cotton production, soaring energy costs, heavy taxation and expensive bank financing, could face further deterioration if alleged loopholes in the EFS were not addressed. He claimed that after reports of under-invoiced cotton yarn imports from China being sold in the local market, similar concerns had now emerged regarding fabric imports under the same mechanism.
Haq urged the federal government to carry out a strict audit of all imports made under the EFS to prevent further damage to the domestic textile and cotton sectors.
The All Pakistan Textile Mills Association (Aptma) had earlier provided the Federal Board of Revenue (FBR) with data regarding millions of kilograms of yarn allegedly imported through under-invoicing under the scheme. He said the domestic cotton industry had been in decline for several years due to shrinking cotton production and quality, high taxes, record electricity and gas tariffs, and costly bank borrowing. As a result, export-oriented textile mills had become increasingly dependent on imported cotton.
