Despite ban, Indian yarn finds its way into Pakistan

ISLAMABAD: Despite a trade ban, Indian yarn is making its way into Pakistan through smuggling, facilitated by four countries — the United Arab Emirates (UAE), Malaysia, Indonesia, and Thailand.

Sources reveal that the Directorate of Customs Intelligence and Investigation (I&I) Karachi has written a letter to the director of headquarters Customs I&I Islamabad, advising them to circulate information to all field formations. The directive aims to ensure due diligence regarding the origin of yarn coming from Dubai, Malaysia, Indonesia, and Thailand.

According to the sources, the Directorate of Customs I&I Karachi has credible information that Indian yarn is still finding its way into Pakistan via Dubai, Malaysia, Indonesia, and Thailand.

The sources said that the labels, packing, and containers of consignments of yarn originating from India in these countries are then shipped to Pakistan. There has been a substantial increase in yarn imports from these countries since 2019-20.

In 2019-20, Pakistan imported 141 metric tonnes (MT) of yarn worth Rs69 million from the UAE, followed by 666 MT worth Rs231 million in 2020-21, 1018 MT worth Rs355 million in 2021-22, and 890 MT worth Rs319 million in 2022-23.

Similarly, Pakistan imported 10,608 MT of yarn worth Rs2.1 billion from Malaysia in 2019-20, 15,149 MT worth Rs2.5 billion in 2020-21, 18,154 MT worth Rs4.5 billion in 2021-22, and 19,266 MT worth Rs5.9 billion in 2022-23.

Furthermore, Pakistan imported 105,780 MT of yarn worth Rs21 billion from Indonesia in 2019-20, 144,128 MT worth Rs30 billion in 2020-21, 158,680 MT worth Rs50 billion in 2021-22, and 95,195 MT worth Rs39 billion in 2022-23.

Meanwhile, Pakistan imported 80,086 MT of yarn worth Rs16 billion from Thailand in 2019-20, 87,784 MT worth Rs16 billion in 2020-21, 97,057 MT worth Rs29 billion in 2021-22, and 65,675 MT worth Rs28 billion in 2022-23.

Overall, Pakistan imported 200,963 MT of yarn worth Rs41 billion in 2019-20 from five countries, including India, UAE, Malaysia, Indonesia, and Thailand. In 2020-21, Pakistan imported 247,740 MT of yarn worth Rs49 billion, 274,909 MT worth Rs84 billion in 2021-22, and 181,026 MT of yarn worth Rs74.5 billion in 2022-23 from the mentioned countries, excluding India.

Pakistan’s cotton yarn exports skyrocket

Before the trade ban, Pakistan imported 4,348 metric MT of yarn worth Rs2.2 billion from India in 2019-20, 39,685 MT of yarn worth Rs19 billion in 2018-19, 19,971 MT of yarn worth Rs6.4 billion in 2017-18, and 25,392 MT of yarn worth Rs11.1 billion in 2016-17.

According to the Pakistan Bureau of Statistics, Pakistan imported 234,777 MT worth Rs142 billion of synthetic and artificial silk yarn in 2022-23.

In February 2019, India withdrew the most-favoured-nation (MFN) status for Pakistan and imposed a 200 per cent tariff on all imports from Pakistan after the Pulwama terror attack.

The former prime minister Imran Khan’s government suspended all kinds of trade with India after New Delhi revoked the special status of Jammu and Kashmir in August 2019 by removing sections of Article 370. However, after the coronavirus pandemic, Pakistan allowed the import of drugs and pharmaceuticals from India in May 2020.