‫هللا الرَّ حْ ٰم ِن الرَّ ِحي ِْم‬

ِ ‫ِبسْ ِم‬
Semester Project
Pakistan Studies

Submitted By
Saddam hussain
FA19-EPE-099
Table of Contents

Pakistan Industrial Growth......................................................................................................................2

Industry......................................................................................................................................................2
Historical Background (Pakistan Industry)............................................................................................3
Industries in Pakistan................................................................................................................................3
Fertilizer Industry.....................................................................................................................................3
Issues related to Fertilizers Industry....................................................................................................4
Social Issues........................................................................................................................................4
Economic Issues.................................................................................................................................5
Commodity Prices..............................................................................................................................5
Transportation Costs.........................................................................................................................5
Natural Gas........................................................................................................................................5
Political Issues....................................................................................................................................5
Textile Industry.........................................................................................................................................5
History........................................................................................................................................................5
Barriers in Growth................................................................................................................................6
Social Issues........................................................................................................................................6
Economic Issues.................................................................................................................................6
Political Issues....................................................................................................................................7
Sport Industry............................................................................................................................................7
Purchasing from China.............................................................................................................................7
Issues of the Industry............................................................................................................................8
Social Issues........................................................................................................................................8
Labor issues........................................................................................................................................8
Less interest of investors in this industry.........................................................................................8
Lack of infrastructure / Facilities.....................................................................................................8
Sports condition in Pakistan.............................................................................................................8
Availability of credit facilities...........................................................................................................9
Economic Issues.................................................................................................................................9
Lack of Technology...........................................................................................................................9
Power / Energy Shortage...................................................................................................................9
 Political Issues....................................................................................................................................9
Lack of Govt. interest........................................................................................................................9
Security risks......................................................................................................................................9
Heavy tariff on import of machinery...............................................................................................9
No subsidy from government..........................................................................................................10
Conclusion................................................................................................................................................10
References................................................................................................................................................10
 Pakistan Industrial Growth
Industry
The sector that manufactures goods or related services within the economy is known as industry.
The biggest source of income for a group or company is an indication of what industry it should
be ranked in. The industrial sector is very important for the economic development of every
country. It is a historical fact that countries with strong industrial sectors have shown greater
economic growth and development.

Historical Background (Pakistan Industry)

At the time of partition in 1947, Pakistan had almost no industrial base. It acquired only 34
industries out of a total of 955, while the rest belonged to India. Such a small number of
industries was not enough for a nascent country to face the industrial world. Over time, Pakistan
has utilized all available resources, both domestically and externally, for the rapid development
of the manufacturing sector.

Industries in Pakistan
Pakistan's industrial sector is the second largest individual sector of the economy with 25% of
GDP. This industrial sector consists of large, medium and small scale. At the time of
independence, the overall large-scale industrial contribution to GDP was only 1.8%. However,
small industries accounted for 4.6% of GDP. Now, from 2010-11, large scale industries have
contributed 4.4% to the real GDP growth rate while small scale industries have contributed
7.5%. It is clear that even after six decades, our industrial sector has not played its role despite its
potential. Most of the current economic problems in Pakistan are ultimately linked to the slow
pace of industrial development. Accelerated industrialization is considered by economists to be
an independent cure for stabilizing our economy.
Following are the main industries of our country

 Fertilizer Industry
 Textile Industry
 Sports Industry

Fertilizer Industry
Pakistan's fertilizer industry has immense potential and is on track to become one of the largest
exporters of fertilizers in the region in the years to come. Factors that are directly contributing to
these forecasts are the issuance of recent LNG maintenance licenses and the establishment of
new fertilizer plants by leading organizations in the country.
Being primarily an agricultural state,
Pakistan's growth is heavily dependent on the
fertilizer industry. According to reports,
Pakistan's demand for fertilizer has far
exceeded its supply. However, with the
development of technology and the growing
number of players in the industry, the
production capacity has exceeded 6 million
tons per year, which has been consistently
outpacing national demand for the past few
years. Furthermore, due to greater awareness
among the farmers, the consumption of
fertilizer has increased manifold.
There are currently six major fertilizer producers in Pakistan, including Fuji Fertilizer, Engro
Fertilizer Company, Dawood Hercules, and
Fatima Fertilizer. According to media
reports, the Chinese government is keen to
find ways to enter Pakistan's agriculture and
fertilizer sector. The Chinese state and
banks are expected to provide capital and
loans to Chinese companies interested in
setting up projects in Pakistan. There are
rumors that China is going to set up a fertilizer plant that will produce 800,000 tons a year.
In the first half of 2018 alone, total sales of urea increased by 45% to 1.63 million tones and
sales of DAP increased by 6% to 434,000 tones. Furthermore, with the onset of kharif sowing
season, further increase in demand for
urea can be expected. Also, the
comfortable inventory level of urea and
DAP has improved the price increase for
local fertilizer manufacturers and as a
result, the average price of urea has
increased by 4.70% in a month. At
present, international urea and DAP prices
are hovering at 240 and 385 per ton,
respectively, and it is expected to remove the price cap (Rs 1,400 per bag) from urea as well as
give local manufacturers a will provide additional benefits.
Issues related to Fertilizers Industry
Social Issues
Some people may have some vague ideas about ground pollution and environmental impact, but
not in depth. For example, most people are not aware that large amounts of nitrogen in the soil
can kill fish in bodies near water. To understand these effects, we need to know what chemical
fertilizers are and how they work.
Economic Issues

Commodity Prices
Prices of maize, wheat, soybeans and other crops are fluctuating. Farmers will decide which
crops to plant based on profitability, which will affect the demand and price of certain nutrients.
Transportation Costs
Fertilizer is a large, heavy container that can be transported over long distances in many routes,
including sea tankers, railways, trucks and river routes. They all run on petroleum products, so
oil prices increase the cost of transporting fertilizers.
Natural Gas
Natural gas performs two functions in the manufacture of fertilizers. When making nitrogen-
based fertilizers, natural gas is first mixed with atmospheric nitrogen to produce ammonia. It is
also used to generate the heat required for the conversion process. Natural gas prices and
availability affect the final cost of nutrients.
Political Issues
The biggest challenge for the fertilizer industry is that. It is subject to the standard rate of
General Sales Tax (GST), like other non-essential industries. Moreover, the recent
implementation of the Gas Infrastructure Development Cess (GIDC) has been extremely
damaging. GIDC is a special tax, the main purpose of which is to ensure adequate supply of gas.
However, despite the heavy financial burden of GIDC, the fertilizer sector has not received any
reliable assistance or assurance for a sustainable supply of gas.

Textile Industry
The textile industry in Pakistan is the largest manufacturing industry in Pakistan. Pakistan is the
eighth largest exporter of textile products in
Asia. The textile sector contributes 8.5% to
Pakistan's GDP. In addition, the sector employs
about 45% of the country's total workforce (and
38% of manufacturing workers). With the third
largest spinning capacity in Asia after China
and India, Pakistan is the fourth largest
producer of cotton and contributes 5% to the
global spinning capacity. At present, there are
1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small ones. Textile
manufacturing units.
History
In the 1950s, soon after independence from British rule in South Asia, textile manufacturing
became a central part of Pakistan's industrialization. In 1974, the Government of Pakistan
established the Cotton Export Corporation of Pakistan (CEC). The CEC worked to prevent
private industrialists from participating in international trade. However, in the late 1980s, the role
of the CEC diminished and by 1988-89, private manufacturers were able to buy cotton from
ginners and sell it domestically and abroad. Between 1947 and 2000, the number of textile mills
in Pakistan increased from 3 to 600. In the same period, the number of spindles increased from
177,000 to 805 million.
Barriers in Growth
In recent years, Pakistan has faced competition from regional players, including Bangladesh,
India and Vietnam. Over the past decade, Pakistan's share of the global textile market has shrunk
from 2.7 per cent to 1.7 per cent, with Bangladesh growing at 1.9 to 3.3 per cent and India at 3.4
to 4.7 per cent. Barriers to growth include:

Social Issues

 Research and Development: While limiting the competitiveness of Pakistan's textiles in the
global market, a limited effort has been made to improve the quality and quantity of textiles
in Pakistan through research and development.
 The lack of road and rail network facilities in the country.
 The severe power shortfall in the country.
 Tax Good quality soft water is not available for our textile sector (especially in Karachi).

Economic Issues

 Cost of production: Rising production costs in the country have hampered investment as well
as export competition. Monetary policy and vertical changes in KIBOR rates have
contributed to an increase in the cost of doing business and a reduction in the lending
capacity of local manufacturers.
 Energy Crisis: Pakistan is currently facing a massive energy crisis. The government manages
deficits through power shortages (or blackouts) of more than 5,000 MW per day due to
energy demand. These power cuts have significantly affected the manufacturing industries in
Pakistan. Illegal textile mills have shut down their units due to inability to sustain operations.
In addition, mills have reportedly refused export orders for failing to comply with daily
orders when power cuts can last up to 12 hours.
 Tax Poor communication facilities are also the biggest obstacle in the development of
Pakistan textiles.
 Our utility rate is too high to compare with regional countries.
 The financial instability in the country which led to the decline in foreign investment.
 Tax Our tax collection system is very weak, which is also the most important obstacle to our
development.
 The energy crisis in the country (crisis in natural gas / crisis in access to petrol).

Political Issues

 Governmental Poor management by various government agencies.

 Bad governance and poor law and order situation in the country (especially in Karachi
and Khyber Pakhtunkhwa).
 Pakistan Bad image of Pakistan presented by international media and international
agencies.
 Warnings issued abroad to stop its citizens from traveling to Pakistan are also the biggest
obstacle to Pakistan's development.
 Government Corruption in the government department is also an important issue for
Pakistan's development.
 Pakistan is a member of the WTO and signs a number of international agreements, such
as intellectual property rights and international arbitration agreements that apply to
Pakistan adhering to the rules.

Sport Industry
In Pakistan, Sialkot is a hub for sports industry
and manufacturing. Today, however, the
situation is different. Like any other industry,
this business is dominated by Chinese products.
Earlier, the Sialkot market was very strong in
sports production and even for World Cup
matches in different countries, they produce
standard products. Currently, the entire market is
affected by Chinese products because of the low
prices they offer. There are still some items
available in the market produced by the local
industry.
Most sports equipment is imported from China. Since
China is the most populous country in the world,
economies of scale concept automatically apply to
various manufacturing sectors. They make everything
in bulk which automatically reduces the price. The
entry of Chinese products into the market has severely
affected local sports manufacturers in Pakistan. On the
other hand, it does not affect the vendors.
Purchasing from China

Nowadays, even sports dealers in Sialkot are buying from China. The shipment has two routes,
one via the Karakoram Highway and the other at the seaport. Since Sialkot is in the northern part
of the country, the route is used for the supply of goods. Shipment goes to Islamabad,
Rawalpindi, Lahore and finally to Sialkot. To buy from China, one must have a representative
who has extensive knowledge of the Chinese market. Shopping in China is not an easy task
because of the differences in language in the Chinese market and various other fraudulent
methods. If one is interested in buying large quantities of commercial goods, then it is reasonable
to say that buying from factories at reasonable prices is not a possibility of fraud. Unfortunately,
most businesspeople do not take advantage of this opportunity and prefer to receive small
quantities of sporting goods from third party distributors in China. There are many dealers for a
product. An investor needs to do market research to find out which dealer is selling products at
the best rates.
As far as the price of a product is concerned, there is an interesting trend in China that is not only
limited to the sports industry but also to all Chinese products. Chinese manufacturers can accept
any price for the manufacture of a product while reducing the quality of its product. Wholesalers
who buy from China can easily buy a specific product at different prices but with different
features.

Issues of the Industry

The law and order situation in the country has led to a decline in overall industry sales, which
has affected both business activities and consumer demand. Another reason for the declining
sports activities is the government's lack of interest in opening new playgrounds for the general
public. In metropolitan cities, there are a limited number of grounds where children can go out in
the evening and take part in any kind of sports.
There is also a big difference in the price of a product in the local market. There is no central
authority to control prices. Sialkot, to know about the market and how important it is to know the
products in terms of quality and price.

Social Issues
Labor issues
There are some labor problems in the sports goods industry due to trade unions, lack of labor
and lack of interest in labor. We have no institution for labor training.
Less interest of investors in this industry
Due to the challenges / concerns facing the sector, investors are reluctant to invest in the sporting
goods industry.
Lack of infrastructure / Facilities
Infrastructure such as roads and transportation facilities help in the development of any industry,
as the resources available in the country are used to transport raw materials and manufactured
goods. Pakistan does not have enough transport facilities and road infrastructure to meet the
needs of Pakistan's sports equipment industry.
Sports condition in Pakistan
The sports situation in Pakistan has been badly affected by terrorism and it has severely affected
the stability of the state in the last decade. Pakistan is facing major challenges of terrorism
instability, so this sector is also suffering.
Availability of credit facilities
The sports goods industry is an important contributor to Pakistan's total exports. The sector has
low credit facilities which could jeopardize the performance and growth of the sports goods
industry in Pakistan. Interest rates are also high, more than double that of China (12%) in 2013.

Economic Issues
Lack of Technology
The low use of technology in the sports equipment industry is a major concern for the sector, as
the sports equipment industry is largely small-scale, so it is difficult for the industry to adopt
high-value technology. This sector is mainly dependent on labor, which is less familiar with the
use of technology, so in modern times it is a problem of this sector, because in today's business,
technology is of paramount importance and technology depends on the performance of this
sector. Lack of effects.
Our rivals, China, India and Turkey, are using much better technology to compete with the rest
of the world.
Power / Energy Shortage
Energy resources in Pakistan are not enough to meet the energy needs / demand of the Pakistani
industrial sector, so it is also a big challenge for the sports goods industry in Pakistan. Artificial
energy sources are quite expensive, and the sector is small-scale, so it cannot afford alternative
sources. This can increase production costs.

Political Issues
Lack of Govt. interest
This sector of export, sports goods industry is being neglected by the government of Pakistan as
less interest / concern is being shown by the government, less involvement of the government in
this sector is the reason for low productivity and low efficiency of this sector. Is formed.

Security risks
Security risk has been a major concern for almost every sector / industry in Pakistan for the last
15 years or so due to terrorism, as Pakistan is at risk of terrorism and instability. The growth and
development of the sector really. There is a loss.
Terrorism has tarnished Pakistan's image, which is why foreign companies and businessmen are
reluctant to come to Pakistan and lack confidence in dealing with Pakistan.
Heavy tariff on import of machinery
Because the sector needs to import machinery to improve production methods, it has to pay
heavy taxes on machinery imports, which prohibits the use of modern machinery in the
manufacture of sporting goods. ‫۔‬
No subsidy from government
The government of Pakistan is not providing any subsidy to the sporting goods industry in
Pakistan due to which the sector is relying on itself to meet the huge challenges of international
competition.

Conclusion

References