Pakistan Media: Pakistan Textile Industry Development Dilemma

Release time:

2018-12-26

Pakistani media reported on December 24 that the Imran Khan government expects that the decline in energy prices and currency devaluation measures can help boost the country's stagnant exports, control the current account deficit, and ease the pressure on the rupee currency., But will these measures work? Ghulam, one of the top knitwear exporters from Lahore, said that "the decline in natural gas prices and currency devaluation will have a positive impact on textile and clothing exports, but this impact is limited to preventing the export situation from deteriorating further." In fact, these measures will indeed improve the competitiveness of exporters, especially those in Punjab. In recent years, due to high energy prices, insufficient electricity and natural gas supplies, and expensive exchange rates, Pakistan has gradually been surpassed by competitors such as Bangladesh, Vietnam and India. "But if the textile industry wants to boost textile exports, it needs more support to promote product added value and investment in new technologies and production capacity."

Over the past decade or so, Pakistan's market share has been squeezed by countries such as Bangladesh and Vietnam, and its terms of trade have deteriorated, the article said. According to World Bank data, Pakistan's overseas textile shipments increased by only 27 per cent between 2005 and 2016, while sales in Bangladesh and Vietnam increased by 276 per cent and 445 per cent, respectively, during the same period. According to data from the National Bureau of Statistics of Pakistan, in the first five months of this fiscal year, Pakistan exported 5.5 billion million U.S. dollars in textiles and clothing. Except for knitwear exports, which increased by about 11%, exports of other low value-added products declined. Kamal, chairman of the Pakistan Textile Exporters Association, said that the decline in natural gas prices and currency devaluation have improved the competitiveness of textile and clothing exports by nearly 3%-8%, and the overall impact on the country's exports will continue to appear within six months. Industry insiders hope that the government will promulgate a tax and export tax rebate support policy of 113 billion rupees to ease the pressure on exporters. Kamal said that the progress made by Bangladesh and Vietnam in the textile industry is due to their government support and subsidy policies. From 2005 to 2007, Pakistan was one of the leaders in the textile trade. But subsequent energy shortages have led to the bankruptcy of many large exporters. Although he believes that the decline in natural gas prices has improved the industry's competitive environment, there is still much that needs to be done. "The first is to provide a level playing field, and then to address other issues such as policy consistency and marketing. Buyers will not come to a country where policies change rapidly. We need to reassure them that any policies we are implementing are long-term so that they can plan future orders from Pakistan."

Clothing brand fleeing China's next "world garment factory" is rising

Return to List

Pakistan government to take measures to restore international competitiveness of textile industry

More information