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Political Factors: Sales tax of 3% on fabrics irks Pakistan textile sector.

Pakistans Federal Board of Revenues (FBR) recent move of subjecting all import and supplies of all fabrics, irrespective of it being finished or raw fabric, to uniform sales tax (ST) of three percent has met severe criticism from the valueadded textile industry of the country. The textile industry is already suffering due to large amount of pending dues of sales tax and custom duty refund and rebate, as well as the Federal Excise Duty (FED) and Duty Drawback of Local Taxes and Levies (DLTL) claims, which have caused severe liquidity crisis, preventing the exporters from honoring their export obligations. Increasing cost of production:The cost of production of textile rises due to many reasons like increasing interest rate: The increasing interest rate caused barrier in opening new manufacturing units & also increase the production cost of existing units. The instant increase in cost of electricity also caused an increase in production.

The above all reason increased the cost of production of textile industry which create problem for a textile industry to compete in international market. Economical Factors: decreasing value of Pakistani rupee : The value of Pakistani rupee is continuously decreasing which increased the cost of imported raw material. The removal of subsidy & implementation of new taxes from government also increase the cost of production. -Effect of Inflation The increase in inflation causes the increase in the cost of production of textile good which return in downsizing. The double digit inflation is also affecting exports of textiles. Lack of new investment:Pakistan textile industry is facing problem of Low productivity due to its obsolete textile machineries. To overcome this problem and to stand in competition, Pakistan Textile Industry will require high investments. Positive Economic factor: The share of textile industry in the economy along with its contribution to exports, employment, foreign exchange earnings, investment and value added makes it the single largest manufacturing sector for Pakistan. It

contributes around 8.5 percent to GDP, employs 38 percent of the total manufacturing labor force, and contributes between 60-70 percent to total merchandise exports. Indeed, with exports reaching about $8.6 billion in 2004-05, Pakistan is one of the largest textile exporters in the world. Social Factors: Positive: Life style changes: Busy lifestyles offers more relaxed attitude towards the selection of clothing. As now-a-days more women are working outside the home and for this they need comfortable, easy to wash, east to care yet trendy clothing styles. Consumer buying patren: People know about brands and they prefer more to purchase branded clothes. They are so much conscious about their look and dressing. Negative: Technological Factors: Positive:

The benefits of automation include lessened dependence on skilled labor, reduced expenses on lighting, transport, meals, human resource management and other facilities, increases in sewing time and productivity by 200 to 300 per cent and a return on investment within a year. Moreover, the excessive movement of material and labor, a non-value added operation, is common in the garment industry. Centralized cutting or packaging facilities can reduce the costs associated with this. To keep inventories to minimum required levels and reduce extra expenditures and idle stocks, stores can be automated to monitor levels of the in-hand stock of goods. -Use solar power to run their machines. -Introduce their app for android. -Decrease their cost by the using of latest machinery. Recent technological developments in clothing production equipment have centred around machinery for knitting, linking, pleating, decorating and embroidering.