Pakistan Cotton Industry Flags Under-Invoiced Chinese Fabric Flooding Local Markets

Pakistan’s cotton industry has raised fresh concerns over alleged under invoiced fabric imports from China, claiming large quantities are being diverted into the local market through the Export Facilitation Scheme (EFS), putting additional pressure on an already struggling textile sector.

Chairman of the Cotton Ginners Forum, Ihsanul Haq, said the industry is facing multiple challenges, including falling cotton production, rising energy costs, heavy taxation, and expensive bank financing. He alleged that after reports of under invoiced Chinese cotton yarn entering the domestic market, similar practices are now affecting fabric imports under the EFS.

Haq called on the federal government to conduct a comprehensive audit of all imports made under the Export Facilitation Scheme, including cotton, yarn, and fabric, to prevent further damage to Pakistan’s cotton and textile industries.

He said the All Pakistan Textile Mills Association (APTMA) had already submitted data to the Federal Board of Revenue (FBR) regarding millions of kilograms of allegedly under invoiced yarn imported under the scheme. He also warned that expanding sugarcane cultivation in traditional cotton growing areas, along with declining cotton quality, has forced textile mills to increase cotton imports from the United States and Brazil.

The Cotton Ginners Forum also urged the government to reduce the sales tax burden on the ginning industry, warning that high taxes could push more cotton trading into the undocumented economy and undermine Pakistan’s credibility in international cotton markets.

Meanwhile, persistent rains slowed trading activity during the week, with cotton prices falling by Rs. 300 to Rs. 500 per maund as fresh arrivals improved. Market participants also warned that forecasts of heavier rainfall and possible flooding could pose additional risks to the standing cotton crop in the coming weeks.