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History of Pakistan Textile Industry 
History of Pakistan Textile Industry
Increase in the cotton production and expansion of textile industry has been impressivein Pakistan since 1947. Cotton – bales increase from 1.1 million bales in 1947 to tenmillion bales by 2000. Number of mills increased from 3 to 600 and spindles fromabout 177,000 to 805 million similarly looms and finishing units increased but not inthe same proportion. It employs 50% of industrial labour force and earns 65% foreignexchange of total exports. Pakistan’s textile industry experts feel that Pakistan hasfairly large size textile industry and 60-70% of machines need replacement for theeconomic and quality production of products for a highly competitive market. Butunfortunately it does not have any facility for manufacturing of textile machinery of  balancing modernization and replacement (BMR) in the textile mills which need tothink about joint ventures for the production of complete spinning units with china,Italy and production of shuttle less looms (Projectile) with Korea, Taiwan and Italy.Cotton textile industry has been premier industry in Pakistan and a major source of export earning and employment. It also helps in value addition to the manufacturingsector of the economy. During the six years between 1993 and 1998, production of yarn (in quantity terms) registered a steady annual growth rate of 302% in Bangladeshand 405% in India. On the contrary, Pakistan registered a growth rate of 101% per annum in yarn production although it ranked third after China and India in the globalyarn production during the same six years. In exports, while Taiwan, India and therepublic of Korea registered an annual increase of 18.1%, 27.7% and 5.4%respectively during 1993-1998, Pakistan registered a negative growth of 4.8% oneimportant development was that till 1997, Pakistan was the world’s largest exporter yarn followed by India. However, in 1998, India gained the NO 1 position, leavingPakistan at NO 2 In the case of cotton cloth production, a number of Asian countrieshave been emerging in the international market to compete with Pakistan. Thesecountries are Bangladesh, India, Taiwan, Indonesia, Thailand, Turkey, Sri Lanka andIran. The latest available date on overall export performance of Pakistan comportedwith some regional countries is given in table 1: The above-mentioned presentation inthe context of international scenario highlights the adverse position of Pakistan’stextile industry when is likely to continue further following the full implementation of WTO agreement from 2005 onwards when an era of free trade will start globally. Notwithstanding the above fact, current stagnation in the local textile industry can beovercome through efforts, consistent with charges occurring in the international
 
market. It must be appreciated that all successive governments since the birth of cottontextile industry in Pakistan have been encouraging the textile exporters to penetrateinto new market and also to broaden the base of exportable commodities by includingvalue added textile goods so that reliance on exports of cotton, cotton yarn and coarsefabrics gradually become minimal.Reflecting on the state of affairs, Abid Chinoy, Pakistan cloth merchants Association(PCMA) Chairman, Appreciated government’s efforts to encourage new exports andfinding new markets, which need aggressive export marketing. The steps taken on themonetary front, such as the frequent devaluation of Pak rupee in terms of dollar couldnot improve the cost competitiveness of exportable products due to increase in pricesof the local and imported inputs of the local textile industry, and also due to inelasticdemand for the Pakistan’s exports. It has been rightly mentioned in the latest stage bank of Pakistan’s annual report (FY01) that, “Over the years Pakistan’s exportsreceipts have been vulnerable on account of the narrow base of exportable items,concentrated markets and low value addition ‘this indicated that the growth in thecountry’s overall exports, including textile products which contributed more then 60%of total export receipts each year, could to be related some cosmetic and ad hocmeasure like devaluation of Pak rupee and concession export credits. The first textilecommission, which was constituted by the first material law government in 1960 had,inter-alia, recommended that an economic size textile unit should preferably have25,000 spindles and 500 looms. No new mill with only 12,500 spindles and withoutlooms should be sanctioned. However, no need was paid to the advice by thesanctioning authorities with the result that an excess capacity had tented to build up inthe spinning sector.During the period 1973 to December 1992, some 71 spinning units with 1,136, 835spindles, 6,600 rotors ands 7,329 looms were closed down. In 1992, a foreignconsultant form was hired by the government to look into the stagnating conditions inthe local textile industry. One of the observations of the foreign consultant was“Pakistan has failed to make real progress in the international market and is being over taken by many of the neighboring competitor countries. The spinning sector,traditionally the core of the industry, is already in the crisis with many spindles lyingidle and mills being forced to close. Worse still, this sector will be hit by the projecteddecline of its major markets in Japan and Hong Kong in the coming years.”Another important strategic recommendation given by the foreign consultant verymuch relevant to the current
 
conditions: “It is vital that companies play very positive role in the markets, whicheach one having its own marketing activity, whose job is to understand the need of thecustomers and the ever changing competitive dynamics of the markets. In order toimprove exports, Pakistan’s Readymade Garments Manufacturers and ExportersAssociation (PRGMEA) has urged the commerce minister Abdul Razzak Dawood toset up an Apparel Board for the promotion of export of woven and kit garments whichfetch US$ 2.5 billion foreign exchange for the country. The industry experts are of theopinion that in the order to have a strong industrial base, Pakistan economy needinvestment upswing. Pakistan’s economic growth performance during recent years has been dismal: as against the average growth rate of 6.1% in the 1980s, the half and4.0% in the 2nd half of the 1990s. The major micro-economic instability factors likehigh inflation rate, budgetary deficit, continuous depreciation of rupee, economicsanctions, etc. could not help the investment process. Such an environment cannot beconducive to investment and growth. Exporters of textile products have found thetarget of US$ 10.4 billion set by the government for the year 2002-2003, as achievableand termed it a realistic approach. The textile sector which constituted 69% of totalexport during 2001-2002, believes that enhanced quota by the European Union andTurkey would make this possible to fetch another US$1 billion this year.The rise in export of value-added products from Pakistan was another point of encouragement for the textile sector. “The export of value-added products rose to57.4% from 53.9% last year-a clear sign that we are moving in the right direction,“said the Chairman of all Pakistan textile mills association.The trade policy is considered an acceptable paper, but in the industry does not fineanything that could lead to a high level exports achievement and remove tradeimbalance.Pakistan’s textile sector earned US$5.77 billion during the outgoing year, comparedwith US$5.577 BILLION OF 2000-2001 indicating a growth of 0.69%. “Textile vision2005” has identified the present status and opportunities to make in roads inconventional and hew markets and has developed sectoral recommendations, hence thesectoral committees set up by the federal textile Board (FTB) would play an importantrole be ensuring the availability of quality raw materials on competitive prices andimprovement in designing, and would adopt quality standards and increase productivity levels. It would attract foreign brands and promote Pakistani brands withworld-class standers.
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