The textile industry due to positive efforts of PTI-led government has witnessed high profits after it has brought some relief to the textile industry.
The textile sector، the sole largest export oriented sector of Pakistan has turned to full capacity production and witnessed high profits after the government has provided some relief to the textile sector.
It is also a fact that Pakistan is getting higher export orders for textiles since China, the single largest textile exporter at world across is struggling against the deadly coronavirus.
The experts are of view that if all went well in same direction، the government will easily export target of $24-25 billion this fiscal year 2019-20.
But some media persons are making speculations regarding downward trend of economy observed in China due to spread of coronavirus and West focusing on outsourcing their textile products elsewhere, to be the main reason for business boom in Pakistan.
But according to the experts this is a pre-mature stance of the political Pundits because the Pakistani textile manufacturing cannot be compared to a massive economy like China and the multinational corporations cannot easily afford to shift businesses this quickly, it takes years to expand outsourcing in other regions and history has proved that it is almost impossible to shift businesses with such quick pace.
The experts also believe that China will soon recover from the outbreak of Coronavirus and it will again be stronger and stable as it was before.
There are some reports that the textile exports could be doubled over the next five year if the government moved in same direction on industrial sector.
The textile industry has managed to perform better than other sectors and has made exports of around $12.45 billion in 2019 and many industrialists have acknowledged these efforts of the government for uplifting of industry.
The boost in Pakistan’s economy can be seen as for the first time in 2019, Pakistan hosted the 35th World Fashion Convention, organised annually by the International Apparel Federation, a European lobby of fashion brands. The event, attended by executives of many global brands and associations, has somewhat changed Pakistan’s perception abroad and exporters are gearing up to cash in on the advantage.
Although according to the available data, first five months of current fiscal year 2019-20 were more encouraging as textile shipments to overseas markets grew 4.68% to $5.76 billion compared to the same period of the preceding year. Textile and clothing exports in 11 months of 2019 rose a negligible 1% year-on-year.
On the other hand, investment in the textile sector for replacing and installing new imported machinery increased 17% to $480 million in the period under review against $453 million in the same period of 2018.
According to the experts the industry was promised energy supplies at subsidized tariffs as part of the government’s incentive package, the decision, approved by the Economic Coordination Committee, could not be implemented in true letter and spirit.
It is also a fact that some industrialists are approaching courts as they are not receiving utility bills at the reduced tariffs notified by the government.
Meanwhile, as per some news reports, there are speculations that Government may withdraw energy subsidy granted to the textile sector. The industry has already lost its zero-rated status, alongwith four other major export sectors, in the 2019-20 budget and is required to pay sales tax from the current fiscal year.
It is also important to mention that despite expressing reservations about some loopholes in government policies, many industry players still believe that the political leadership is doing its homework to help enhance the share of textiles in the country’s global exports.
According to official data, the exporters of readymade garments reported the highest growth of 32% in first 11 months of 2019.
But it can not be ignored that the data available on record alarms that cotton arrivals as of December 15, 2019 dropped to 7.86 million bales against 9.96 million bales at the same time last year. The drop in production of cotton – a key raw material for textile mills – is likely to cause its shortage and force the textile sector to increase cotton imports.
The experts believe that the industry needs at least 15 million cotton bales in a year to meet its processing requirements.
According to statistics provided by the All Pakistan Textile Mills Association (APTMA), the industry is eyeing an export target of $13.3 billion for FY20 with projected investment of $1 billion.
The textile sector claims that things are moving in the right direction after some relief was provided to the industry by the incumbent government.
APTMA Group Leader Gohar Ejaz has also acknowledged that the present government resolved textile sector’s revival issues pending for the last 10 years, citing that the government ensured energy tariff to textile industry at par with regional and other competitor countries.
The APTMA leader mentioned that earlier, the textile industry was closing down but now it was planning to set up new textile units due to government’s support and viable policies.