A 2 per cent customs duty was recently imposed by Pakistan’s Federal Board of Revenue (FBR) on import of cotton and yarn to encourage use of the local crop and save foreign exchange reserves. The duty goes into effect from July 15. The board also withdrew exemption of additional customs duty on import of basic raw materials for the textile industry.
The country spent foreign exchange of around $915 mn on importing raw cotton between July 2017 and May this year, showing a rise of around 20 per cent, according to some reports. Cotton output grew 11.8 per cent to 11.935 mn bales in fiscal 2017-18. Cotton production was 10.671 mn bales during fiscal 2016-17.
