Pakistan has begun imposing % tariffs on imported cotton yarn

According to Pakistan’s “Business Chronicle” report: Due to the substantial increase in cotton yarn imports from India this fiscal year, the Pakistani government has begun to impose a 5% tariff on imported cotton yarn. Sources said that in the first eight months of this fiscal year (July 2013-February 2014), Pakistan’s cotton yarn imports increased to 9.2 million bales, from 10.121 million kilograms in the same period of the previous fiscal year to 20.097 million kilograms, an increase of as much as 117%. According to reports, the substantial increase in cotton yarn imports has put Pakistan’s domestic cotton yarn companies under tremendous pressure. In fiscal year 2010, the price of cotton and downstream products in the international market rose sharply, and Pakistan’s cotton yarn exports also increased. In order to reduce the cost of raw materials in the downstream industry, the Pakistani government decided to cancel import tariffs on cotton yarn and implement quota management on cotton yarn exports. In fiscal year 2011, as the supply and demand of cotton yarn tended to normalize, the Pakistani government canceled the cotton export management tax and quota system, but did not restore cotton import tariffs, while India and China still imposed 10% and 5% tariffs on imported cotton respectively. At present, Pakistan’s cotton yarn import growth mainly comes from India, and the Indian government provides huge subsidies to domestic cotton yarn companies in the form of tax rebates and interest rate subsidies.