Textile sector plays a key role in the economy of
Pakistan. The sector accounts for more than two-thirds of annual
exports, 40 percent of employment and 9 percent of GDP. Pakistan
textile sector has also helped our economy in earning forex in an
ample amount. New era of World Trade Organization (WTO) has knocked
our door and given us a news of real challenge for our all sector in
general and particular for the textile sector. The Post-WTO regime has
heated-up competition, opened new avenues for all the countries to
make their all-out efforts and beat their rivals in their respective
TEXTILE-EXPORTS: QUOTA AND NON-QUOTA
The share of quota exports in total rose from 39.2
percent in first quarter of FY-2004 to 44 percent in first quarter of
FY-2005. This rise came from higher growth in quota exports to the US
and the EU, with the latter having larger share on account of
increased exports of cotton fabric to this region. Pakistan enjoys a
strong position in bedwear and cotton fabric exports to USA, whereas
its share in knitwear exports is gradually improving. In the EU
market, knitwear, cotton fabric and bedwear are important export
categories. Keeping in view country's current encouraging performance
in the major markets of EU and the US, Pakistan is expected to
maintain its present status of a large textile and clothing supplier
in the international market despite facing tough competition from
China and India.
Another opportunity available to Pakistan lies in
the relocation of textile manufacturing units from industrial to
developing countries in order to take advantage of lower production
cost. While Pakistan is world's fourth largest cotton producer after
China, the US and India, it can be considered as a country of choice
by some of the big foreign textile producers. Realizing this
opportunity, government has already announced certain incentives in
the trade policy for FY04. Despite these strengths, country's textile
sector is also faced with certain issues in the post-liberalization
era. As far as non-quota exports are concerned, Pakistan textile
minister Mushtaq Cheema has claimed that Pakistan will export $9
billion worth of textile products this year, of which 65 percent will
be non-quota exports.
Major markets are mainly United States, European
Union (EU), and Gulf region where Pakistan exports most of its textile
products. Though, India and China would be the main beneficiaries of
quota-free textile trade, Pakistan would out pace them in almost all
textile categories produced by its industry. Pakistan's exports to the
United States are expecting sharp rise in the coming year, after
quotas will have been removed due to strong advantage in specific
textile categories over all its competitors.
As analysts are of the view that China takes gold
in the post-quota regime, India appears the only likely contender for
silver with textile exports expected to grow from $11 billion to $50
billion in the next five years. India will raise its share in the US
clothing market from 4 percent to 15 percent backed by hefty
investments and capacity enhancements over the last few years.
Logically, India is counting on the fact that buyers will surely
diversify out of China and they will be the next logical place for
western buyers to look.
According to the WTO study China, India and
Pakistan will take advantage of the imminent liberalization in textile
and apparel trade. These nations will be able to export more products
to the EU and the US at lower prices after costs linked to quotas will
have been eliminated. Quotas have the same impact as import tariffs.
Their effect on US clothing imports from China, India and Pakistan
equals to additional tariffs. However, this increase would be at the
expense of other countries. According to analysts, Pakistan would
corner both China and India in textiles produced by its most efficient
and high tech industries.
TEXTILE EXPORTS AND ITS BUYERS
Following are the major textile exports and their
1. Cotton Yarn; 2. Cotton Fabrics; 3. Hosiery; 4.
Ready made Garments, and 5. Bedwear.
COTTON YARN: Pakistan's
cotton is regarded as the best among varieties of cottons of similar
staples grown elsewhere in the world. Pakistan's textile industry
enjoys several advantages over those of many other countries as far as
the production of quality fabrics and yarn is concerned and is a world
leader in the export of cotton yarn, including coarse, medium and fine
varieties. Pakistan's leading buyers are Japan, Republic of Korea and
Cotton and Cotton products occupy a pivotal position in the economy of
Pakistan. Pakistan's textile industry enjoys several advantages over
many other countries as far as the production of quality fabrics
concerned, which include availability of high-grade locally, produced
raw cotton and trained manpower. Cotton Fabrics buyers are USA, Hong
Kong and Dubai.
Hosiery goods exported from Pakistan are known for their fine quality
in the world market. Manufacturers follow international sizes and
specifications. They also welcome buyer's samples, specifications and
designs. For this item the leading buyers are USA, United Kingdom and
READY MADE GARMENTS:
Pakistan produces ready made
garments of all pattern and styles, of the latest fashions and
quality. The industry is adequately equipped to produces latest
fashions to suit tastes and needs in any part of the world. For this
segment the buyers are USA, Saudi Arabia and Germany.
bedwear has a distinctive identity. Pakistan manufactures the best
quality printed and dyed bed sheets, quilt covers fitted bed sheets,
flannelette bed sheets matching pillow covers that are displayed in
famous departmental stores in Europe and United States. Exports for
bedwear are moving to such quality-conscious markets as France,
Germany, Benelux, United Kingdom, Norway, Sweden and the United
Anti-Dumping Duty is the intensifying trend in the
developed countries (such as Canada, Australia the EU and the US) to
impose anti-dumping duties so that they could not only restrict their
import levels but also provide couched protection to their domestic
industries. As a matter of fact, under the umbrella of WTO an
importing country can impose an anti-dumping duty if there is evidence
that dumping is occurring and it is hampering the local firms. Since
the use of this measure is not always fair, there is a need to make
this procedure more transparent. Currently, Pakistan is facing
anti-dumping duty on one of its major textile export category i.e.
bedwear, that has resulted in a steep fall in country's bedwear
exports during Q1-FY05.
In this connection, the textile exporters lament
that they would not be able to reap the benefits of the end of quotas
owing to high production costs, social compliance and environmental
issues, and above all withdrawal of duty concessions in the EU and
continuance of the 13.1% anti-dumping duty on Pakistan bedlinen.
Pakistan has to move on this count cautiously and
ensure that we fulfill all fundamental requirements of the
environmental agreements, the agreement on technical barriers to
trade, substantially improve quality of our exports and make our
policies and implementation mechanism environment-friendly.
The unbridled and unethical use of spurious
pesticides must end. Pakistan should introduce eco-labelling across
the board, be prepared to switch over to organic cotton growing and
effectively stop the use of hazardous chemicals in the whole range of
textiles and clothing.
For us, there is no policy option as 55 percent of
our exports are destined to the US and the EU, which have very high
health, safety and environment standards.
Social issues such as respect for core labor
standards, including child labor's minimum age, would continue to be
As far as buyer specification is concerned it can
be either an opportunity or a threat. Because, in post-WTO era all the
exporters are getting ready to meet the buyer needs. So, in this
situation, Pakistan textile sector has to be very cautious that it
must try hard to meet the buyer needs otherwise due to tough
competition we could be beaten by our competitors. Thus, we have to be
on toes to face the buyer needs and requirements.
Since Pakistan is a partner of United States in
combating terrorists, now Pakistan's image is improving. United Sates
is continuously rewarding Pakistan with certain incentives. We can't
deny that all countries have their strengths and weaknesses. Success
depends upon efficient capitalization of strengths and management of
weaknesses to provide an honest and positive business image. It is
also recognized that image management has to be professionally
achieved for best results.
Majority of our exporters are presently weak in the
marketing management abilities and the financial/human resources
required for aggressive market share enhancement and product and
geographical diversification. It is essential that professional and
financial help be provided by the government in partnership with the
exporters, for aggressive international promotions, distributors and
gaining access to new customers and markets.
Businesses in Pakistan do not have a research-based
'business plan' to meet the challenges and opportunities of post quota
regime. Even the larger businesses houses have not developed capacity
for in-house marketing research. The new world trade order
incorporates opening of the markets and therefore will most definitely
result in the consumers preference of choosing from
countries/suppliers the best quality products at the most economical
By and large our textile industry decision makers
have to adopt a very aggressive and dynamic policy of marketing to
maintain and increase share of the world trade in all fields of