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Overview
Pakistan’s textile Industry is largely based on three products. There is a significant textile
spinning sector, a textile weaving sector and a value-added sector. Pakistan is currently the
world’s 8th largest textile exporter in the world, with the value of Pakistani textiles at 9 billion
dollars.
In the past 15 years textile exports of Pakistan have seen a steep decline in the overall
global economy. A variety of factors have contributed to the steep decline of Pakistan’s textile
lag in exports. Some of those problems include security challenges, high interest rates, lack of
In 2013 the Pakistani textile industry was granted a GSP plus status, which allowed 20 %
of Pakistani textile exports to enter the EU at a 0% tariff rate and 70% of textile exports at
favourable tariff rates. Despite securing the GSP plus status the Pakistani textile Industry is still
in shambles.
The government has not done enough to foster a good textile environment. Pakistan’s
share in the export market in textile went from 2.2% in 2006 to 1.8% in 2013 while at the same
time Bangladesh’s share increased from 1.9% in 2006 to 3.3%. India’s share increased from
3.4% to 4.7% in the same time period. Foreign competition has been a great obstacle in
Pakistan’s textile exports. Total exports of Pakistan in 2014-2015 were $23.6 billion while in
2010-2011 they were $24.8 billion which is a reduction of 4.8 % not factoring in inflation.
Positive macroeconomic policies from countries such as Bangladesh, Vietnam, and India
have helped prompt up their respective Industries. While simultaneously the government has
not been taking tangible action in Pakistan to foster the same type of policies to help the
Pakistani Industry.
Even while global consumers have reduced the amount of textile they buy Pakistan has
been worse hit by all countries because Pakistan faces numerous internal challenges as well.
Even the gas price of Pakistan is not preferable, The cost of gas is $6.7 per million British
thermal units while it is $4.2 in India, $3.1 in Bangladesh, and $4.2 in Vietnam. Electricity tariffs
are also very high in Pakistan, they are 14.5 cents per unit in Pakistan and 6-9 cents in terms of
Another factor to analyze is the rupee value. A devaluation of the rupee relative to the
dollar is positive for the textile industry. The reason that is because a weaker rupee makes
textile imports more attractive for importing nations such as the United States. The Rupee to
the dollar value has stayed relatively stable over the past year or so.
Lack of subsidies also play a role. The government over the past few years has largely
been subsidizing other industries particularly the gas and fertilizer industry, leaving the textile
factors have lead the textile industry to die almost. An analysis of why this is the case and what
factors lead to Pakistan’s downturn in the global scheme of things will be interesting to write.
What would make this an interesting paper is that there is not only one factor
associated with the decline of the Pakistani textile Industry. Regional competition, high input
prices, and lack of positive policies have all contributed to the death of the Pakistani export
textile industry. Analyzing all these factors and what has their repercussions would make this
https://tribune.com.pk/story/1000706/textile-industry-in-its-worst-patch-in-history/
https://www.statista.com/statistics/236397/value-of-the-leading-global-textile-
exporters-by-country/
https://www.dawn.com/news/1072051
https://www.bloomberg.com/news/articles/2016-09-20/a-deserted-karachi-factory-
signals-pakistan-s-textile-crisis
http://www.academia.edu/24669691/Pestel_analysis_of_Textile_industry_of_Pakistan