TEXTILE INDUSTRY OF

PAKISTAN
ANALYSIS OF PAKISTAN INDUSTRIES
Name: Anum Nadeem Khan

ERP: 16864
Significance
Pakistan's economy depends intensely on its cotton and material areas. The cotton-handling and
material businesses make up practically 50% of the nation's assembling base, while cotton is
Pakistan's chief modern harvest, providing basic pay to provincial family units. In total, the
cotton-material parts represent 11 percent of GDP and 60 percent of export bills. (“Textile Industry
of Pakistan - An Overview” n.d.)

The industrialist belonging to this industry have now stepped into the politics where they are able
to manipulate policies in accordance with their benefits.

As indicated by the economic survey of Pakistan 2008-09, the textile industry contributes over
60% to the nation’s total exports, which adds up to around 5.2 billion US dollar. According to
the 2012 Economic Survey of Pakistan, given by the finance ministry, the cotton business itself
comprised about 4% of the absolute size of the economy. (“Textile Industry of Pakistan - An
Overview” n.d.)

Textile objects are one of the basic and essential human necessity close to food. In Asia, Pakistan
is the eighth biggest exporter of material items. Cotton is the fundamental Cash harvest of the
country which stands as the third biggest exporter of basic cotton. (“Textile Industry of Pakistan
- An Overview” n.d.)

The industry is one of the most significant divisions of Pakistan. It is, actually, the foundation of
the Pakistani economy. It has an absolute set up turning limit of 1550 million kg of yarn,
weaving limit of 4368 million square meters of texture and completing limit of 4000 million
square meters. The business has a manufacturing limit of 670 million units of pieces of clothing,
400 million units of knitwear and 53 million kg of towels. (“Impact of the Textile Industry on
Pakistan’s Economy” n.d.)

On the other hand, the industry’s basic raw material is home grown. 46% of the manufacturing
industry is dependent on textile while 41% of the industrial labor is employed here. This being
said, it is a heavy labor intensive industry. The sector contributes 8.5% to the GDP, indirectly.
“Pakistan is the world’s 4th largest producer and 3rd largest consumer of cotton. The Textile and
Clothing Industry has been the main driver of the economy for the last 50 years in terms of
foreign currency earnings and jobs creation.” (Ahmed, n.d.)

The country is the third biggest shopper of cotton. The textile and Clothing Industry has been the
fundamental driver of the economy for the last 50 years which is a long time as for cash income
and occupation’s formation. (Akhlaq, n.d.)
Issues faced by the industry
The first issue the industry faces is low quality of cotton as compared to its competitors. This is
mainly due to the fact of less or no Research and development in Pakistan. As a result of the
ensuing low gainfulness in cotton crops, ranchers are moving to other money crops, for example,
sugar cane. It is the absence of legitimate R&D that has prompted such a state. They further
denounce cartels, particularly the pesticide area, for blocking reasonable R&D. The pesticide
part stands to profit by hindering neighborhood R&D as better return cotton is more pesticide
safe and will cause them profits if farmers gain better and efficient ways of farming. (Khan and
Khan 2010) The ground reality is too unfortunate for the future of Pakistan as a potential sector
is unable to flourish because of the other supporting industry.

Moreover, the textile industry has old hardware and machinery for the production process. The
weakness to adopt modernize hardware and machines has prompted the decay of Pakistani textile
strength. Because of out-of-date technology the expense of manufacturing is higher in Pakistan
when contrasted with different nations like India, Bangladesh and china. (Khan and Khan 2010)
Ahsan Munir, in a dawn article, says, “However, with time, old machinery and processes created
inefficiencies in the industry affecting its competitiveness.” (Munir 2018) He further adds that
countries like Sri Lanka and Bangladesh has jumped into the competition which no one saw
coming. This creates a huge drawback for the industry that where the productivity reserves are
on depletion in order to compete internationally. Although, Textile industry has a lot of home
demand but if it continues to depreciate its efficiency, cheaper alternatives from the industry will
start flowing in no time.

The inflation rate has entered into double digits and interest rates have increased. Side by side,
the value of Pakistani has continuously depreciated. All of this adds to the increasing cost of
production for the textile industry. This creates incompetency for the textile industry of Pakistan
in the international market.

Additionally, textile industry of Pakistan has been cratering to issues like energy crisis since a
long time. The load shedding, that’s still prevalent in the country, curbs the production capacity
of the industry. The mass shedding of power causes fast diminishing production levels which
additionally decreased the export receipts. The expense of manufacturing has furthermore risen
because of instant increment in electricity tariff. Subsequently, some factory proprietor utilizes
energy substitutes like generator, due to energy crisis, which increases their cost of production
further. Because of such up roaring circumstances, the capability of this industry in worldwide
market affected gravely. (Khan and Khan 2010)

Moreover, the sector is confronting issue of Low efficiency because of its outdated machines. To
beat this issue and to remain in rivalry, Pakistan Textile Industry will require high funds. There is
a persistent pattern of putting resources into spinning since many years. Pakistan's material
industry assesses that around Rs1, 400 billion (US$32 billion) of speculation was required till
2010 so as to accomplish the government’s export target. (Khan and Khan 2010)

However, Pakistan is facing inside issues which confines the new ventures into the sector. The
unusual interior state of Pakistan causes a fast declining in foreign or internal investment which
influenced all businesses, however with higher intensity on the textile industry particularly.
 Reasons for Lack of higher value addition
An article, by the Express Tribune, published in 2018 where it gave insights to government’s
plan to add higher value addition in the textile industry. It reports that Chairman Mubashar Butt
predicted that exports will be increasing whereas the government policies which aided the
industry which will then “earn good foreign exchange for the country” (Tribune.com.pk 2018b) .

The most shocking fact from which Pakistan is learn is Bangladesh as it does not even grow
cotton but their exports touched $30 billion. We produce cotton however a non-grower is now in
our competition. (Tribune.com.pk 2018a)

It can be noted that this fact emerges from the issue that Pakistan has cheaper raw cotton
available if imported. This means that it is unable to produce cotton at a lower cost due to loss of
productivity and outdated machinery. All of this has a chain effect only because the country
lacks some updated basic at one of the tail’s end. In an article, by Imran Rana, PTEA
Chairperson Mian Shaiq Jawed stressed to facilitate the cheaper raw material imports so that
finished goods can be imported by adding value.

The artificial strands are exposed to import obligations so as to protect the local business. This
isn't reasonable as access to an exportable crude material ought to be zero evaluated. The
administration conspires that permit obligation free import of raw materials utilized for trades are
unreasonably bulky for the little and medium exporters. The powerlessness to get artificial fibers
at universally modest rates, blocks manmade strands' utilization in the country. (“Only Value-
Addition to Help Textile Exports Pick up Lost Threads” n.d.)

Pakistan is at the point where the domestic spinners don't mix cotton with artificial strands,
therefore there is no chance of delivering different kinds of strands that are mainstream all
around the world. Since our product do not have the variety expected to deliver high value that is
included in the articles of mainstream quality clothing, our attire trades get a lower cost than our
rivals. (“Only Value-Addition to Help Textile Exports Pick up Lost Threads” n.d.)

The exporters, especially the small-scale ones, are quite often unfit to satisfy the conditions
required to acquire a good price and become uncompetitive universally.
On the other hand, our exports have not diversified into different segments of the market,
meaning that we do not offer a variety of clothes. According to Mansoor Ahmed, he writes that
we are only limited to making boy’s shirts and pants while we women’s apparel range remains
untouched. This means that we are not even delivering at our full capacity. On a brighter note,
this opens doors for expansions for textile sector.

An article of dawn news is seen reporting expansions plans by the industrialist: “Encouraged by
the government’s initiatives to help reduce the cost of energy for exporters, major Punjab-
based textile groups on Friday announced that they plan to invest $1 billion in new value-
added textile projects and capacity expansion for exports.” (Hasnain 2019)
Issues with the quality of raw material and skill base.
One of the major issues with the raw cotton that is available in Pakistan is the contamination
issue. The products gets contaminated from the early stages of the process i.e. the picking
process. Picking is done manually where the cotton is plucked once the bolls are opened.
However, the polluted is not only restricted till here. The contamination happens from the
picking process to the grinning. According to (“TEXTILE INDUSTRY IN PAKISTAN,” n.d.),
cotton catches the highest impurity through human hair, caused by dupatta (Head Scarf) or any
fabric sheet.

On the other, addition of water by pickers, early daytime picking of cotton before dew
evaporates and storing of cotton on wet soil so as to build its weight ruins its quality.
(“TEXTILE INDUSTRY IN PAKISTAN,” n.d.)

Taking into account the essentialness of the cotton and textile part in the national economy, there
has been expanding accentuation on quality control and the creation of defilement free cotton.
This will empower the textile business to extend the advertising base for Pakistani items and
understand their inborn incentive in the worldwide market. The administration has just taken a
few measures to present and actualize a cotton normalization and evaluating framework in the
nation, just as measures to defeat cotton tainting. (Jim.Robinson 2010)

In spite of the fact that Pakistan is the fourth biggest maker of raw cotton on the planet, it despite
everything lingers behind in profitability per unit when contrasted and the per hectare yields
being acknowledged in some other significant cotton developing nations, for example, Australia,
China, Greece, Turkey and Syria. Our national normal yield is practically stale because of
ramifications of the variances of climate, the non-presence of virus-resistant varieties, the
development of new infections, and the limited initiations of proper development techniques.
(Jim.Robinson 2010)

After this the process to turn raw product in a final form is also contaminated with inefficiencies.
This starts with an already low quality product which then leads to lower exports. To combat the
issues and to make the textile business efficient once more, certain measures should be taken as
suggested by Ahsan Munir in an article published by dawn. In the first place, general wasteful
aspects in tasks should be recognized and eliminated. This may incorporate utilizing increasingly
productive electric engines, wires, better-planned and steered funneling, and better protection of
hot and cold channels. Such enhancements would help decrease working expenses.

Additionally, better structure plan and a helpful workplace will add to efficiency. Government
may give impetuses to firms which expel their operational wasteful aspects.

Secondly, efficiency should be improved through modernization. This implies getting most
recent hardware from abroad, which requires financial assets and prepared human asset to work
it. To this end, the legislature would need to go into an open private organization with the Textile
business. (Munir 2018)
 Major institutions in the area of Research and Education associated with
Textile Industry
References
Ahmed, Yasin. n.d. “Textile Industry of Pakistan,” 13.
Akhlaq, Mohammed Ather. n.d. “SWOT Analysis of the Textile Industry of Pakistan,” 3.
Hasnain, Khalid. 2019. “Textile Makers Plan $1bn Capacity Expansion.” DAWN.COM. April
20, 2019. https://www.dawn.com/news/1477288.
“Impact of the Textile Industry on Pakistan’s Economy.” n.d. Accessed May 19, 2020.
https://www.ukessays.com/essays/business/effects-of-textile-industry-on-growth-of-
economy-of-pakistan-business-essay.php.
Jim.Robinson. 2010. “Major Issues and Developments in Pakistan Cotton.” Cotton Grower
(blog). March 17, 2010. https://www.cottongrower.com/cotton-news/major-issues-and-
developments-in-pakistan-cotton/.
Khan, Aftab A, and Mehreen Khan. 2010. “Pakistan Textile Industry Facing New Challenges,”
no. 14: 10.
Munir, Ahsan. 2018. “Productivity in the Textile Industry.” DAWN.COM. January 29, 2018.
https://www.dawn.com/news/1385793.
“Only Value-Addition to Help Textile Exports Pick up Lost Threads.” n.d. Accessed May 19,
2020. https://www.thenews.com.pk/print/291968-only-value-addition-to-help-textile-
exports-pick-up-lost-threads.
“TEXTILE INDUSTRY IN PAKISTAN.” n.d., 15.
“Textile Industry of Pakistan - An Overview.” n.d. Accessed May 19, 2020.
https://textilelearner.blogspot.com/2015/12/textile-industry-of-pakistan-overview.html.
Tribune.com.pk. 2018a. “Value Addition in Textile Industry Stressed.” The Express Tribune.
April 7, 2018. https://tribune.com.pk/story/1679462/2-value-addition-textile-industry-
stressed/.
———. 2018b. “Textile Value Addition: Govt Taking Steps to Make Industry Competitive.”
The Express Tribune. December 25, 2018. https://tribune.com.pk/story/1873984/2-govt-
taking-steps-make-industry-competitive/.