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Pakistan textile sector suffers distortions

The textile sector in Pakistan accounts for 6.5 per cent of the global trade. The country is almost non-existent in the global trade map on 93 per cent of the trading sectors. Structural imbalances are severe. The domestic spinning industry has 25 per cent more yarn-producing capacity than can be woven in the country. So the country exports 25 per cent lowest value-added textile production as yarn.

To get higher exports orders Pakistan will have to address the structural imbalances. The ratio of cotton use in Pakistani textile products is 75 per cent while the industry consumes only 25 per cent of manmade fibers by blending them with cotton. The global average is 75 per cent manmade fibers blended with 25 per cent cotton.

This means Pakistan is catering to 25 per cent of the global textile market. The local industry has the machinery and state-of-the-art equipment to produce a complete textile range. However, its wings were clipped when the government of Pakistan guaranteed 10 years’ high duty protection to a multinational investor for establishing a polyester plant in Pakistan. The protection made it impossible for the textile industry to compete globally in blended textiles.

The local market accounts for only 20 per cent of the textile consumed in the country. Local entrepreneurs are denied the domestic market because of under-invoicing, smuggling and massive imports of used clothing.