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Pakistan textile industry rebounds

The biggest challenge for the past year in global economies and their supply chains was the COVID-19 itself. One of South Asia’s textile manufacturing countries, Pakistan also faced difficulty throughout the period but surprisingly within a few months, the country’s textile sector was moved on track.

Figure: Pakistan faced difficulty throughout the COVID-19 period but surprisingly within a few months, the country’s textile sector was moved on track. Courtesy: ILO Asia-Pacific/Flickr. Creative Commons

The recent monthly data published by the Pakistan Bureau of Statistics for the first four months of the current financial year confirms that the textile and clothing export shipments are back on the growth of their quantity and dollar value.

The data shows that the textile shipments have surged by 3.8 percent to $4.8 billion between July and October from $4.6bn a year ago. The rise in the textile and clothing group has been faster than the 0.6pc growth in the overall export.


All Pakistan Textile Mills Association (Aptma) Chairman Adil Bashir described this could not happen automatically.

Bashir told, “Industry’s demand for rationalizing energy tariff had been accepted by the current government and just when we were about to take off in early 2020, COVID-19 hit the world.”

Around 60% share in total exports of Pakistan’s economy comes from the textile market. Contributing to the national gross domestic product (GDP) is 8.5% and with 15 million people, directly and indirectly.

Stakeholders want to expand Pakistan’s minuscule share in global textile exports.

The government has recently announced a lucrative energy package for the industry to help the exporters. The package does away with peak electricity rates, offers reduced tariffs on additional power consumption, and fixes power price at $0.07 a unit and gas tariff at $0.065mmbtu for the export industries.

The central bank has reduced interest rates by 625bps, approved refinancing of wages and deferred payments of the principal amount of loans, provided relief under the Export Financing Scheme (EFS) and the Long-Term Financing Facility (LTFF). Furthermore, the State Bank has also launched a long-term facility.

Like all global players, Pakistani counterparts have been urged to focus on value addition for a greater share in the European and American markets. A lack of value addition is the reason why export figures have been almost stagnant for a decade.

In the financial year 2019-20, Pakistan’s textile sector fetched $12.5 billion in export earnings against $13.33 billion in 2018-19, whereas in 2010-11 the export revenue stood at $13.8 billion.

In the first five months of 2020-21, the sector posted export revenue of $6.05 billion against $5.76 billion. Many exporters and government officials are calling it a huge success. Most of the textile entrepreneurs are optimistic about the future, believing Covid-19 has somehow helped boost the sector.

Currently, the entire value chain is overloaded with export orders due to lockdown in competing markets and expected the trend to continue in the future. They need new investment in Greenfield projects.

It can be done when the government streamlines things for the sector. A proper textile policy to date implemented in true letter and spirit along with long-term energy tariffs to build investors’ confidence can cause this sector to perform overwhelmingly in the coming years.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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