Textile industry which accounts for more than 8 per cent of gross domestic product and the largest employer of Pakistan’s workforce outside agriculture is losing its lure. There are signs that many factory owners in Punjab are taking money out of their textile business and investing in the fast growing retail markets to cash in on the booming sectors like real estate, education, entertainment, ready-to-wear garments, etc. This is in spite of an array of budgetary measures for this financial year to support investment in the textile industry to boost falling exports. Few consider these decisions enough to save Pakistan’s textile sector which is collapsing and encourage investment at least in the short to medium term.

A major factor driving investment out of textile industry is the losses suffered by manufacturers including major textile groups over the last three years on the back of declining exports. According to Amena Cheema, CEO of the Punjab Board of Investment and Trade, a large number of textile factories in Punjab are closed and in some cases the owners just do not have money to pay the salaries to their workers.

Overall, Pakistan’s exports are down 12 per cent or $2.7bn in the first 11 months of the last fiscal from a year ago. The textiles, which form almost three-fifth of export revenues, have declined by 7 per cent or $909m due to the sluggish yarn demand from China and subdued international cotton prices.