Value-addition leads growth

Related Articles

Textile is a term that comes from “texture” which is a Latin word that means “to weave”. A cloth is manufactured by weaving or knitting forms a fabric. In 1950, the textile industry saw its dawn in Pakistan. The Pakistan Industrial Development Corporation (PIDC) came into being which had the main objective of industrializing the country in major fields.

Today, the textile industry is often considered a backbone of Pakistan’s economy. The country’s textile Industry is the fourth Largest Cotton Producer, sixth largest importer of raw cotton and the third largest Consumer.

Pakistan’s textile industry ranks amongst the top in the world. Textile exports for the 5MFY18 have shown a moderate increase of 8% on a year-on-year basis to clock in at $5.51 billion. According to the Pakistan Bureau of Statistics (PBS) latest numbers released, textile exports for November 2017 increased by 7% as compared
to the corresponding period last year. The growth was led by value added segments, which managed to counteract the effect of dampening cotton yarn and cotton cloth exports. Taking a closer look at the PBS statistics reveals decent growth in double digits for knitwear exports, which increased by 18% while ready made garments and bed-wear posted a 14 percent and 12% growth respectively, on a year-on-year basis

The textile industry contributes approximately 46% to the total output or 8.5% of the country GDP. In Asia, Pakistan is the eighth largest exporter of textile products providing employment to 38% of the employer of the country. Cotton based textiles contribute over 60% to the total exports, accounts for 46% of the total manufacturing and provide employment to 38% manufacturing labor force. The availability of cheap labor and basic raw cotton as raw material for textile industry has played a major role in the growth of the Cotton Textile Industry in Pakistan.

The government is reacting to the changes in global policies, especially the pro-textile policies of competitive countries. For example, a package of Rs 180 billion was announced by the Prime Minister for the export sector. However, the deal has come to a halt after the distribution of Rs 32 billion for exports up to 30 June 2017 which resulted in over 10% increase in garment exports.

The textile industry has been continuously modernizing their machinery. But what it needs first is to thrive. The basic economics of competitive equilibrium is applicable domestically and internationally as well, especially during the last couple of decades with the implementation of WTO rules and information technology.

Just with the click of a mouse, a buyer or a trader sitting in a remote village of Pakistan can compare the price of a shirt being made in other parts of the world. So the road ahead is full of both growth and challenges with the world open to it. The right measures and support can take the country’s textile industry to the next level.