With the EU extending the implementation of the Generalized Preferential Tariff System Special Preferential Program (GSPPlus) to Pakistan, the implementation of the second phase of the China-Pakistan Free Trade Agreement (CPFTA), and Pakistan’s tax reduction measures, With all personal protective equipment (PPE) export licenses and the cancellation of the earlier 5% regulatory tax on imported cotton yarn, Pakistan’s cotton yarn imports are expected to increase as demand increases in 2021.
According to CPFTA, China has canceled tariffs on 313 imported products (130 of the 313 products are textiles and garments), and these projects involve Pakistan’s export interests.
Abdul Razak Dawood, Commercial Advisor to the Prime Minister of Pakistan, said that the EU’s extension of GSPPlus to 2022 is expected to increase Pakistan’s textile exports by US$500 million per year.
Pakistan’s total cotton yarn imports in 2020 dropped 37.19% from the previous year to US$65.39 million, with an average monthly import of US$5.45 million (the monthly average in 2019 was US$8.68 million).
Due to the outbreak of the new crown epidemic, Pakistan’s cotton yarn imports dropped sharply in May 2020. In May 2020, the total value of Pakistan’s cotton yarn imports dropped to US$1.88 million, a decrease of 72.43% from the previous month. From May 2020 to August 2020, it remained around US$2 million per month. It rebounded in September 2020, with an increase of 134.17% from the previous month.
It is expected that the total value of Pakistan’s cotton yarn imports in 2021 will increase by 20-25% compared with 2020, reaching US$81.74 million.
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