Farzana Rubab

The textile industry plays a significant role in the economic growth of Pakistan as it contributes 60% to the total exports of the country, WealthPK reports.

Tariq Tayyab, the additional secretary of the Pakistan Textile Exporters Association (PTEA), told WealthPK that the textile sector formed 8.5% of the Gross Domestic Product of the country and its share was 1.7% of the total trade of Pakistan with the world. “This data depicts the importance of this industry for the economic growth of Pakistan,” he added.

He said that presently the industry was being affected badly by the shortage of major energy inputs including natural gas and electricity. “Both are vital for the smooth, economic and efficient operation of the textile plant. Shortage of any one of them can affect the efficiency of machinery,” he added.

Tariq Tayyab said that the government had given a concession to the textile industry in bills of electricity and gas. However, he said that power and gas outages negatively impacted the sector. “We are unable to run our plants at the maximum installed capacity. Our industry has the potential to export items worth $25 billion annually. However, we can’t achieve this target owing to the shortage of energy,” he added.

He said that the textile exporters were also faced with the lengthy and complex procedure of sales tax refunds. “The long and complex procedures of the sales tax refunds cause problems in cash flow to exporters. Our exporters have to waste time and energy in completing such procedures instead of utilising the same for improvement of their products,” he added.

Tariq Tayyab said that the textile industry was dependent on the supply of cotton. “Unfortunately, research and development are not given due importance in Pakistan, particularly in the cotton sector. Due to the low quality and obviously low profitability of cotton, farmers are switching over to other crops. As a result, the textile industry faces a shortage of cotton,” he added.

He said that cost of production was also increasing rapidly that affecting their exports. He said that Pakistani exporters could not compete with their rivals in the international market owing to the high cost of production.

He said that high energy tariffs, shortage of fuel for machines, high rate of taxes and lack of skilled labour were the main causes of the increase in the cost of production. “Due to these issues, our textile industry is unable to compete with our neighbouring countries like Bangladesh,” he added.

Tariq Tayyab said that Bangladesh was exporting textile products worth $65 billion annually. “It is greater than our total exports. We have the potential of doing more than $25 billion business but our utilisation is only 75% to 80% of the total capacity,” he told WealthPK.

The textile industry of Pakistan is haunted by the high cost of production owing to an increase in electricity rates, a hike in interest rates, a shortage of energy, the devaluation of the Pakistani rupee, increased input costs, political unrest and the abolishment of subsidies.

Pakistan is the eighth-largest exporter of textile goods in Asia. It has been ranked third in cotton consumption and fourth in cotton production. About 40% of the labour force in the country is associated with the textile sector, accounting for 46% of the entire manufacturing sector.

The global recession has also left negative impacts on the textile sector of Pakistan. The government and other stakeholders need to join hands for the resolution of these issues to enable the industry to utilise its full capacity for the economic growth of the country.

According to the Pakistan Bureau of statistics, the volume of Pakistan’s textile exports rose by 25.43% in the first nine months of the financial year 2021-22 year. Pakistan earned $14.242 billion through the export of textile products in the first nine months of the financial year 2021-22 as compared to $11.355 billion during the corresponding period in the fiscal year 2020-21, according to the PBS report, available with WealthPK.

Credit : Independent News Pakistan-WealthPk