APTMA urges tax relief as yarn imports rise, spinning industry crumbles

The All Pakistan Textile Mills Association (APTMA) has demanded urgent policy corrections to counter the devastating impact of an unfair sales tax regime on the domestic spinning and weaving industries.

Yarn imports hit a record 32 million kg in January 2025, pushing total imports for the first seven months of FY25 to 168.83 million kg, far surpassing the 107.64 million kg imported in all of FY24. At this rate, full-year imports are projected to triple, reaching 289.42 million kg.

APTMA warns that local suppliers face an 18 per cent sales tax on exports, while imported yarn remains tax-free, crippling domestic production. Nearly 40 per cent of spinning mills have shut down, and the rest are operating below 50 per cent capacity, leading to massive job losses and billions in lost investment.

The collapse of the spinning sector threatens Pakistan’s cotton industry and weakens the broader textile export chain. APTMA is calling for the restoration of zero-rating on local supplies under the Export Facilitation Scheme (EFS) or the imposition of the same sales tax regime on imports. Ensuring fair policies is essential for sustaining jobs, reducing reliance on costly imports, and stabilizing the economy, APTMA emphasized.