Historically, Pakistan’s textile industry and clothing sector has always been a major contributor to the foreign exchange earner and still contributes about 55% to the total export proceeds.
The Economist reports that Pakistan is the 4th largest producer of cotton in the world and the 6th largest importer of raw cotton, the 3rd largest consumer of cotton, and the 1st largest exporter of cotton yarn. Over 1.3 million farmers, out of total of 5 million are involved in cultivation of this crop.
Textile exports in 1999 were $5.2 billion and rose to become $10.5 billion by 2007. Textile exports managed to increase at a very decent growth of 16% in 2006. In the period July 2007 – June 2008, textile exports were US$ 10.62 Billion. Textile exports share in total export of Pakistan has declined from 67% in 1997 to 55% in 2008, as exports of other non-textile sectors grew.
UN reports 102 countries import textile and apparel products and 104 countries export these products. Global trade in textile and apparel products account for an approximately $440 billion. Pakistan is bogged down in the 5% textile requirement of the world, by dedicating 62% of its GDP share for textile. An anti-dumping of 5.8% has been imposed by the European Union, which has put Pakistan in a desperate position to match competitiveness posed by Bangladesh, India, China, Sri-Lanka and Vietnam.
The top buyers of Pakistani textile goods are: USA, EU, Gulf region, UK, Hong Kong, Japan, Korea, Saudi Arabia, Italy, Turkey, Germany, Norway, France, Canada, Sweden, Australia, etc.
Government vision 2005-2010
To overcome global competition, the Pakistani government in 2006 approved a “Technology-based Industrial vision and strategy for socio-economic” which called for technology up-gradation, human resource development, and establishment of a fully integrated chemical industry in the country.
Investment Policy & Incentives for Vision 2005-2010:
· Whole of textile sector is included in list of value added industries.
· 5% custom duty on imported machinery if not manufactured locally.
· Tax relief: Initial Depreciation allowance (IDA) at 50% of machinery & equipment cost.
Export plan 2006-13 seeks to increase textile and garment’s sector exports to $24.36 billion.
There is a need to engage young qualified generation as roving ambassadors of marketing caliber, diplomacy and professional approach. Pakistan commerce intelligence may chalk out plans to reach every region bloc with in-depth study of regional trade bloc.
The share of textile exports in total exports of the country shrunk to 55 percent so far in the current financial year from well above 60 percent in the past years. As the overall export volume remained stagnant in the first seven months of the current financial year, the shrinking share of textile goods in exports has been adversely impacting the export sector. During July-January 2009-10, total exports came to $10.870 billion as against $10.820 billion in the corresponding period of last year. In the months under review, textile export proceeds totalled to $5.981 billion over $5.849 billion in the same months of previous year.
According to data by Federal Bureau of Statistics, Textile exports during the first eight months of current financial registered negative growth of 5.6% as against the exports recorded corresponding period of the last financial year. Exports during July-February (2008-09) totaled $ 6.47 billion against the exports of $6.85 billion recorded during July-February (2007-08). [Link]
During the time under review, the highest negative growth of 51.24 percent was recorded in the exports of yarn (other than cotton yarn) while exports of art, silk and synthetic textile were decreased by 23.45 percent.
Similarly, exports of...