Pakistan’s KCCI urges removal of 5% duty on polyester yarn to boost competitiveness

The Karachi Chamber of Commerce and Industry (KCCI) has urged the federal government to remove the 5 per cent regulatory duty on polyester yarn in its budget proposals for 2025-26. The chamber believes the move will lower production costs and strengthen Pakistan’s textile value chain.

In its submission, KCCI highlighted that eliminating duties on polyester yarn types such as Polyester Pre-Oriented Yarn, Fully Drawn Yarn, Draw Textured Yarn, and Polyester Spun Yarn under HS codes including 5402-4600, 5402-4700, 5402-3300, 5509-2100, and 5509-5100, would reduce input costs for manufacturers. This, it said, would make fabric more affordable for consumers and boost export competitiveness.

KCCI also backed a return to the cascading tariff structure scrapped in 2005. That system maintained a 2 per cent difference in duty across the polyester value chain, supporting cost balance between raw material suppliers, manufacturers, and exporters.

The Pakistan Yarn Merchants Association (PYMA) has echoed KCCI’s call, stating that the current 5 per cent duty has raised prices, hurt exports, discouraged investment, and resulted in job losses. Both bodies argue that a rational tariff system is vital for industry growth, equitable pricing, and long-term economic stability. KCCI maintains that removing the duty is key to revitalizing Pakistan’s polyester-based textile sector.