Pakistan’s textile exports have dropped 14 per cent compared to last year. Pakistan is the eighth largest exporter of textiles in Asia. This sector contributes 9.5 per cent to GDP and provides employment to about 15 million people. The country is the fourth largest producer of cotton, with the third largest spinning capacity in Asia after China and India, and contributes five per cent to global spinning capacity.

The country’s textile exports consist mainly of raw cotton and low value added products. Other exports are of bed linen, towels and knitwear. Pakistan’s textile exporters want a special tariff and priority in supply of gas and power. They say the government should stop giving preference to exports of raw materials and should instead work for promoting apparel exports. They say raw cotton and combed and carded cotton should not be exported when these raw materials are needed by the value added domestic textile sector.

The sales tax rate has been increased by 50 per cent in the budget for 2015-16. This has blocked a huge amount of exporters’ liquidity. This in turn is expected to damp export figures in coming months. The country’s currency appreciation has also hit Pakistan’s textile exporters.