APTMA wants customs tariff overhaul

LAHORE: The All Pakistan Textile Mills Association (APTMA) has presented the government with an extensive set of proposals seeking fundamental changes to the country’s customs tariff framework for the fiscal year 2026-27, warning that without immediate policy intervention, Pakistan’s textile sector faces irreversible damage from surging input costs, cheaper foreign imports, and a rapidly shrinking industrial base. The proposals, spanning raw material duties, industrial inputs, trade protection measures, and export facilitation schemes, reflect the mounting crisis gripping Pakistan’s largest export-earning sector, where over 40 percent of spinning and weaving units have already shut down and scores of others are teetering on the edge of closure. Central to APTMA’s demands is a reduction in customs duty on Pure Terephthalic Acid (PTA), a key raw material in man-made fibre manufacturing, to 3 percent. The association argued that Pakistan’s sole PTA plant operates on technology that is over three decades old, making its production costs substantially higher than prevailing global benchmarks. The situation has been further aggravated since January 2026, when the National Tariff Commission imposed provisional anti-dumping duties on PTA imports from China ranging between 2. 63 percent and 9. 50 percent, a move APTMA contends will drive domestic prices even higher and place an unsustainable financial burden on downstream textile producers. Equally urgent, in the association’s view, is the need to reduce duties on Polyester Staple Fibre (PSF) and dismantle the entire anti-dumping duty regime surrounding it. PSF imports currently attract a 5 percent customs duty compounded by anti-dumping levies of up to 11. 51 percent on Chinese imports and up to 12. 47 percent on imports from Chinese Taipei, Indonesia, and Thailand. The APTMA maintains that this layered duty structure has pushed domestic PSF prices roughly 20 percent above international market levels, effectively shutting Pakistan out of the global MMF market while enabling a handful of local producers to control supply through quota allocations and channel significant volumes to their own affiliated entities. The association has proposed cutting the customs duty on PSF to 3 percent and withdrawing all anti-dumping duties without delay. The APTMA has further called for zero-rating all dyes and chemicals used by export-oriented sectors under Chapters 28 and 29 of the Customs Tariff, along with the complete elimination of duties on industrial spare parts used in machinery and power plants, arguing that both measures are essential to bringing Pakistan’s manufacturing costs in line with regional competitors. The association has also recommended the creation of a separate HS Code to distinguish recycled polyester from virgin polyester, paired with zero-rating of import duties on recycled and regenerated polyester, to nurture what it described as a strategically vital but still nascent industry segment. On cotton, the APTMA urged a continuation of the zero-duty import regime, pointing out that domestic cotton production has collapsed to just 5. 4 million bales against a total industry requirement exceeding 12 million bales. With the supply gap widening every year, the association argued that duty-free cotton imports remain the only viable means of keeping mills running and sustaining textile export volumes until local cultivation recovers. In measures aimed at shielding domestic producers from the flood of foreign goods, the APTMA simultaneously demanded the imposition of a 10 percent regulatory duty and additional customs duty on imports of cotton and polyester yarn as well as textile fabrics, and called for all such products to be excluded from existing free trade agreements. Yarn imports alone surged to 111 million kilograms in the first half of the current fiscal year, the association said, directly triggering mass shutdowns across the spinning and weaving sectors. On the energy front, the APTMA called for customs duties on gas generators above 1, 250 kVA to be reduced to zero, underscoring the sector’s dependence on reliable captive power generation as a basic condition for industrial survival. The association also urged the government to impose anti-dumping duties on Chinese yarn imports, which it said are entering Pakistan at prices no domestic producer can match, partly on account of China’s substantial input and energy cost advantages. It added a pointed warning that Xinjiang cotton, which forms the backbone of Chinese yarn production, has already been sanctioned by the United States, and that Pakistan’s continued exposure to such supply chains carries serious economic and reputational consequences. Rounding off its proposals, the APTMA demanded the exclusion of all the MMF yarn as well as textile fabrics and cloth from the export facilitation scheme, which it said has been systematically misused to flood the domestic market with cheap imports rather than facilitate genuine value-added exports. The MMF yarn imports under the scheme alone reached 42 million kilograms between July and December 2025, the association noted, a volume it blamed directly for the closure of more than 140 spinning units across the country. Copyright Business Recorder, 2026

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