Pakistan's Economic Coordination Committee (ECC) of the Cabinet will meet on Wednesday, March 31, to consider reopening Indo-Pak trade.
The proposal to allow cotton and sugar imports from India will be presented before the committee for approval at the meeting convened by the country's Ministry of Commerce.
The panel will take up two summaries of the commerce and textile ministry to lift the ban on import of cotton, cotton yarn, and white sugar from India.
The ECC meeting, to be presided over by the newly appointed Finance Minister Hammad Azhar, will have 21 items on its agenda.
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Commerce and Textile ministries have submitted five critical summaries for approval besides others. The Textile Division summary has sought permission from the ECC to lift the ban on the import of cotton and cotton yarn from India in an attempt to overcome raw material shortage for the textile sector.
Besides this, another summary of the commerce ministry also sought approval to permit the import of white sugar from India via the Trading Corporation of Pakistan and other commercial importers. Currently, Pakistan allows cotton, yarn, and sugar imports from all nations except India.
Prime Minister Imran Khan, as in-charge of the Commerce and Textile Ministry, has already approved the summary to be placed before the ECC. The low yield of cotton bales in Pakistan has created problems, paving the way for imports from India.
The government's decision to consider lifting the ban from India come as a relief for the textile sector, which seeks access to cheap raw materials.
Pakistan suspended trade ties with India after New Delhi revoked the special status of Jammu and Kashmir in 2019.
Pakistan has been unsuccessfully trying to drum up international support against India for withdrawing Jammu and Kashmir's special status and bifurcating it into two Union territories in August 2019.
In May 2020, Pakistan lifted the ban on the import of medicines and raw material from India to ensure there is no shortage of essential drugs amid the COVID-19 pandemic.
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This was the first step of reversing the complete suspension of trade with India.
"A meeting was held with the Prime Minister @ImranKhanPTI escalating prices of cotton yarn were discussed. He was sympathetic towards the value-added sectors & advised that in order to ease the pressure on yarn and keep the momentum of value-added exports," Commerce Adviser Razak Dawood tweeted on March 29.
"All steps be taken through cross-border imports of cotton yarn including by land. A summary will be presented at the next ECC to ensure availability of cotton and yarn in the coming months," the commerce adviser said in another tweet.
According to reports, against the annual estimated consumption of a minimum of 12 million bales, the country's Ministry of National Food Security and Research expects only 7.7 million bales production this year. However, cotton ginners have given the lowest production estimates of only 5.5 million bales for this year.
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There is a minimum shortfall of six million bales and Pakistan has so far imported roughly 688,305 metric tonnes of cotton and yarn, costing $1.1 billion, according to the Pakistan Bureau of Statistics. There is still a gap of about 3.5 million bales that needs to be filled through imports.
Due to a shortage of cotton and yarn, the users were compelled to import them from the United States, Brazil, and Uzbekistan.
Imports from India would be far cheaper and would reach Pakistan within three to four days.
Importing yarn from other countries was not only expensive but would also take one to two months to reach Pakistan.