EFS misuse leads to an increase in yarn import, crippling Pakistan's textile sector, says APTMA

The All Pakistan Textile Mills Association (APTMA) has sounded an alarm over the devastating impact of the Export Facilitation Scheme (EFS) misuse on the domestic textile industry. The scheme, intended to promote exports, has been exploited by unscrupulous people to import yarn duty-free, which is then illegally sold in the domestic market.

The increase in cheap, imported yarn has crippled local yarn manufacturers, leading to widespread closures and job losses. The government's recent decision to withdraw sales tax exemptions on local supplies for export manufacturing has further deteriorated the situation, forcing exporters to rely on cheaper imported inputs.

The textile industry, particularly the spinning sector, is teetering on the edge due to high energy costs and the loss of competitiveness. The closure of over 40 per cent of spinning mills threatens to dismantle the entire textile value chain.

Pakistan's economic woes are compounded by the looming debt burden. To sustain growth and meet external obligations, the country needs a thriving textile industry. The government must take immediate action to address the EFS misuse, restore sales tax exemptions, and implement stringent measures to protect domestic manufacturers. Failure to do so could have catastrophic consequences for Pakistan's economy.