In May 2020, Pakistan lifted the ban on import of medicines and raw material of essential drugs from India amid the COVID-19 pandemic

Pakistan's struggling textile industry has voiced its disappointment after the Imran Khan government rejected a proposal to import cotton from India, the world's biggest producer, saying it is the need of the hour to avoid a massive export decline, a media report said on Friday.

The federal Cabinet headed by Prime Minister Khan on Thursday rejected the proposal of a high-powered committee to import cotton from India, with Foreign Minister Shah Mahmood Qureshi asserting that there can be no normalisation of ties until New Delhi reverses its decision to revoke the special status of Jammu and Kashmir.

The Cabinet's decision has disappointed the textile export industry, the Dawn newspaper quoted Pakistan Apparel Forum chairman Jawed Bilwani as saying.

The textile export sector, which was already under pressure due to the COVID-19 pandemic, has been continuously demanding duty-free import of cotton yarn from all over the world, including India, to avert any big loss to textile exports.

Describing Commerce Adviser Abdul Razak Dawood's recommendation to allow import of cotton and cotton yarn from India as realistic and the need of the hour, Bilwani said that the Cabinet must accord serious consideration to the proposal.

The step would send a negative message to foreign buyers as cotton yarn was not available in the country, he said, adding that prices of cotton yarn have increased after the Cabinet's decision.

“The government must ensure availability of cotton yarn if it did not want to allow its import from India,” Bilwani said as he feared massive textile export decline if import of cotton yarn from the neighbouring country was not allowed.

In the current year, Pakistan faced a 40 per cent plunge in cotton production and if it was compared with 15 million bales in 2014-2015, then the drop was 50 per cent this year, he said.

Bilwani said sea freights have already increased by 700 per cent due to the pandemic and the goods now reach their foreign destination in 105 days instead of 25 days.

“If the government did not want to permit import of cotton yarn from India then it must impose a ban on export of cotton and cotton yarn for at least next six months,” he added.

Pakistan's U-turn on Thursday came a day after the Economic Coordination Committee (ECC), under newly-appointed Finance Minister Hammad Azhar, recommended importing cotton and sugar from India, lifting a nearly two-year long ban on its import from the neighbouring country amidst tensions over the Kashmir issue.

It had raised hopes of a partial revival of bilateral trade relations, which were suspended after the August 5, 2019 decision of New Delhi to revoke the special status of Jammu and Kashmir.

India is the world's largest cotton producer and second-largest exporter. Gujarat, Karnataka, Andhra Pradesh, Madhya Pradesh and Tamil Nadu are main cotton growing states.

India's cotton exports jumped over 40 per cent to 10 million bales (of 170 kg each) in the 2018-19 marketing year on strong overseas demand, especially from China, according to industry body CIA.

In May 2020, Pakistan lifted the ban on import of medicines and raw material of essential drugs from India amid the COVID-19 pandemic.

Ties between India and Pakistan nose-dived after a terror attack on the Pathankot Air Force base in 2016 by terror groups based in Pakistan. Subsequent attacks, including one on an Indian Army camp in Uri, further deteriorated the relationship.

The ties strained further after India's war planes pounded a Jaish-e-Mohammed terrorist training camp deep inside Pakistan on February 26, 2019 in response to the Pulwama terror attack in 2019 in which 40 CRPF Jawans were killed.

India's move to revoke the special status of Jammu and Kashmir in 2019 angered Pakistan, which downgraded diplomatic ties with India and expelled the Indian High Commissioner in Islamabad. Pakistan also snapped all air and land links with India and suspended trade and railway services.