IMPACT OF RAW MATERIAL OF TEXTILE INDUSTRIES ON PAKISTAN

ECONOMY

A thesis submitted by
Amara Naz
(2019-23- GCUF-060849)

In partial fulfillment of the requirement for the degree of

Bachelor of Science in
BS Economics

School of Arts

GOVT. MUNICIPAL DEGREE COLLAGE, FAISALABAD

Sep 2023

i
 DEDICATION

This successful effort is dedicated to ALLAH Almighty firstly and secondly to my parents
who make me capable to start a career and provide all the reasonable resumes and inspire me
in my lives. They also lead me to believe that I have, and I can become of my abilities to
become a successful in my lives.
I would like to make a special thank you to my respected teachers and my sincere brother who
play a very important role in my effort with their loving and helpful act. They all show their
love, treated like their beloved one and were concerned at every step where I need guidance.

ii
 ACKNOWLEDGMENT

This thesis has been done by the grace and blessings of ALLAH Almighty and the support of
many people, including my parents, teachers, friends and brothers whom I wish to
acknowledge here. Foremost I would like to express my sincere gratitude to my supervisor
Khalid Iqbal and my brother Mr. Arslan Munawar for their continuous support during this
research and I appreciate all their contribution of time, ideas and the way of guidance to make
my study productive and stimulating. I can never forget to thank the Govt. Municipal Degree
Collage staff for their help in completing project and my families for their love,
encouragement and motivation in helping to complete this research.

iii
 CERTIFICATE

GOVT. MUNICIPAL DEGREE COLLAGE, FAISALABAD

This thesis was written by Mrs. Amara Naz daughter of Munawar Hussain under the
registration number (2019-23- GCUF-060849). It’s all under the directions of Khalid Iqbal
(Supervisor), in partial fulfillment of the requirements of the degree of Bachelor of
Economics.

Co-supervisor Supervisor

________________________________________

Section Coordinator / Chairman

Department of Economic Department

Date:

iv
 TABLE OF CONTENTS
Description Page
Title...........................................................................................Error! Bookmark not defined.
DEDICATION............................................................................................................................ii
ACKNOWLEDGMENT...........................................................................................................iii
CERTIFICATE..........................................................................................................................iv
TABLE OF CONTENTS............................................................................................................v
LIST OF FIGURES....................................................................................................................7
LIST OF TABLES......................................................................................................................9
ABSTRACT................................................................................................................................9
SMETAINABLE DEVELOPMENT GOALS..........................Error! Bookmark not defined.
Chapter 1 Introduction..............................................................Error! Bookmark not defined.
1.1 Introduction to spinning techniques.........Error! Bookmark not defined.
1.1.1 Ring spinning....................................................................Error! Bookmark not defined.
1.1.2 Principle of ring spinning................................................Error! Bookmark not defined.
1.1.3 Compact spinning.............................................................Error! Bookmark not defined.
1.1.4 SIRO spinning..................................................................Error! Bookmark not defined.
1.1.5 SIRO compact spinning....................................................Error! Bookmark not defined.
1.2 Literature review.................................................................Error! Bookmark not defined.
1.3 Research gap.......................................................................Error! Bookmark not defined.
1.3.1 Research objectives..........................................................Error! Bookmark not defined.
Chapter 2 Materials and methods..............................................Error! Bookmark not defined.
2.1 Raw material.......................................................................Error! Bookmark not defined.
2.2 Methods...............................................................................Error! Bookmark not defined.
2.2.1 Blow room........................................................................Error! Bookmark not defined.
2.2.2 Carding.............................................................................Error! Bookmark not defined.
2.2.3 Drawing............................................................................Error! Bookmark not defined.
2.2.4 Simplex (Roving frame)....................................................Error! Bookmark not defined.
2.2.5 Ring frame........................................................................Error! Bookmark not defined.

v
2.2.6 Compact spinning.............................................................Error! Bookmark not defined.
2.2.7 Winding machine..............................................................Error! Bookmark not defined.
2.3 Testing of materials.............................................................Error! Bookmark not defined.
2.3.1 HVI...................................................................................Error! Bookmark not defined.
2.3.2 Hairiness..........................................................................Error! Bookmark not defined.
2.3.3 Uniformity of yarn U%.....................................................Error! Bookmark not defined.
2.3.4 CLSP of yarn....................................................................Error! Bookmark not defined.
2.4 Testing machines.................................................................Error! Bookmark not defined.
2.4.1 HVI tester.........................................................................Error! Bookmark not defined.
2.4.2 Lea Strength Tester..........................................................Error! Bookmark not defined.
2.4.3 METER Tester..................................................................Error! Bookmark not defined.
Chapter 3 Results and discmesions...........................................Error! Bookmark not defined.
3.1 Analysis of testing results...................................................Error! Bookmark not defined.
3.1.1 HVI...................................................................................Error! Bookmark not defined.
3.1.2 Yarn testing......................................................................Error! Bookmark not defined.
3.1.3 Fabric testing...................................................................Error! Bookmark not defined.
3.1.4Yarn hairiness...................................................................Error! Bookmark not defined.
3.1.5 Yarn irregularity U%.......................................................Error! Bookmark not defined.
3.1.6 CLSP of yarn....................................................................Error! Bookmark not defined.
3.1.7 Imperfection index IPI......................................................Error! Bookmark not defined.
3.1.8 Air permeability................................................................Error! Bookmark not defined.
3.1.9 Thermal resistance...........................................................Error! Bookmark not defined.
3.1.10 Water Vapmy resistance.................................................Error! Bookmark not defined.
Chapter 4 Conclmeion and future work....................................Error! Bookmark not defined.
4.1 Conclmeion.........................................................................Error! Bookmark not defined.
4.2 Future work.........................................................................Error! Bookmark not defined.
References.................................................................................Error! Bookmark not defined.

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vii
 LIST OF FIGURES
Description Page
Figure 1.1: Ring frame.............................................................Error! Bookmark not defined.
Figure 1.2: Ring and compact spinning...................................Error! Bookmark not defined.
Figure 1.3: Ring and compact yarn structure...........................Error! Bookmark not defined.
Figure 1.4: SIRO spinning.......................................................Error! Bookmark not defined.
Figure 1.5: Yarn structure of ring, compact, SIRO and SIRO compact Error! Bookmark not
defined.
Figure 2.1: Cotton fibre............................................................Error! Bookmark not defined.
Figure 2.2: Toyoda Ohara blow room machine.......................Error! Bookmark not defined.
Figure 2.3: Howa CM-80 card machine...................................Error! Bookmark not defined.
Figure 2.4: Breaker draw frame...............................................Error! Bookmark not defined.
Figure 2.5:Finisher drawing frame...........................................Error! Bookmark not defined.
Figure 2.6: Simplex machine...................................................Error! Bookmark not defined.
Figure 2.7: Ring spinning machine Toyoda RY-5...................Error! Bookmark not defined.
Figure 2.8: Compact spinning machine K-44..........................Error! Bookmark not defined.
Figure 2.9: Mach coner winding machine................................Error! Bookmark not defined.
Figure 3.1: Hairiness results of developed yarn.......................Error! Bookmark not defined.
Figure 3.2: Yarn irregularity results.........................................Error! Bookmark not defined.
Figure 3.3: CLSP of developed yarns......................................Error! Bookmark not defined.
Figure 3.4: IPI of developed yarns...........................................Error! Bookmark not defined.
Figure 3.5: Air Permeability of developed fabrics.……………………………………...31

Figure 3.6: Thermal resistance of developed fabrics……………………...…………….32

Figure 3.7: Water vapor resistance of developed fabrics……………………...………...32

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 LIST OF TABLES
Description Page
Table 2.1: Blow room machine specifications.........................Error! Bookmark not defined.
Table 2.2: Card machine specifications...................................Error! Bookmark not defined.
Table 2.3: Gauges for card machine........................................Error! Bookmark not defined.
Table 2.4 : Breaker drawing frame machine specifications.....Error! Bookmark not defined.
Table 2.5: Finisher draw frame specifications.........................Error! Bookmark not defined.
Table 2.6: Simplex machine specifications..............................Error! Bookmark not defined.
Table 2.7: Ring frame specifications.......................................Error! Bookmark not defined.
Table 2.8: Compact spinning machine specifications..............Error! Bookmark not defined.
Table 2.9: Winding machine specifications.............................Error! Bookmark not defined.
Table 3.1: Results of HVI........................................................Error! Bookmark not defined.
Table 3.2: Results of Yarns…………………………………………….………………..26

Table 3.3: Results of Fabrics ……………………...……………………………………27

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 ABSTRACT
This research investigates the Impact of Textile Industry in Pakistan’s economy. Data were
collected 100 textile mills, in the form of unstructured questionnaire from the textile industry
of Pakistan. The main respondents of the questionnaire were senior to middle level
management located in Karachi, Hyderabad, Kotri, Nooriabad, Faisalabad and Lahore the
for the purpose of this study yellow pages were used for identification and address of the
respondents and web site of APTMA. From the 100 e-mail addresses, 10 were bounced and
returned as either address unknown or not active anymore. Out of the remaining 90
respondents 48 agreed for the qualitative interviews in which respondents were met face to
face in textile mills located in different cities of Pakistan. Response rate was 90% during this
survey. It was revealed that textile industry has contributed. This research presents the
identified issues that are summarized from the results of qualitative interviews conducted in
the textile industry of Pakistan. The aim is to discover the troubles faced by the textile
industry of Pakistan after the implementation of WTO. The identified issues are divided into
three categories of internal, general as well as global issues. Furthermore, the identified
internal issues are presented separately for each sector of textile industry of Pakistan.
The identified internal issues of spinning are; contaminated cotton, low quality of yarn,
international standards, lower returns from selling yarn, Shifting from cotton to other cash
crops, Improper handling methods, unable to benefit from the competitive advantage. The
identified internal issues of weaving are; weaving is mostly based on wide width, outdated
machinery, non-availability of testing laboratories, lack of value addition, and Pak textile
industry as a basis of foreign exchange earnings for the Competitors. The identified internal
issues of processing are; inconsistency in color/shades, antique methods for dying and
printing, difficult to produce desired shades from poor quality of water, foreign buyers
have become more conscious.
Expensive tests conducted abroad. The identified Internal Issues of Garments are; always
searched for the demand of cheaper garments, lack of computer aided designs, lack of
international market research for wakefulness about the global brands, fabrics not suitable
for the Production of high value-added garments, low price from exporting garments, other
countries taking benefits by labeling the made-ups produced from Pakistan, unable to take
benefits of exhibitions, most of the business is established in small shops, flats and houses,
higher chance of defected production, huge investments went into spinning & weaving only.
The identified national issues are; high cost of production, industrialists are highly risk averse,
lack of training programs, R&D facility of 6% has been withdrawn, no collective method for
solving the industrial problems, changing name from EPB to TDAP is not the solution,
textile / garments city project can be a powerful tool, industrialist shifting business to other
countries
, lack of funds, labors shifting to other countries, there is a huge paper work which takes a
great time, lack of interaction between industry & academia, constraints for the Industry.
Finally, the identified global issues are; removal of quota, awareness about the trade
liberalization, worse image of Pakistan internationally, restriction of EU to buy raw material
from them, lack of ETP, evaluation of factory, delay in delivery, lack of diversification in the
direction of trade, Only developing country to sign the ILO conventions completely, millions
10
of dollars spent to destroy Pakistan’s image internationally, quality issues, labor-intensive
production, Increase in the foreign buyers’ check, Imposition of antidumping duties,
preferential treatment to the competitors, competitors are much strong.
The Pakistan textile industry contributes more than 60 percent (US $ 9.6 billion) to the
country’s total exports. However, currently this industry is facing great decline in its growth
rate. The major reasons for this decline can be the global recession, internal security
concerns, the high cost of production due to increase in the energy costs etc. Depreciation
of Pakistani rupee that significantly raised the cost of imported inputs, rise in inflation rate,
and high cost of financing has also effected seriously the growth in the textile industry. As a
result neither the buyers are able to visit frequently Pakistan nor are the exporters able to
travel abroad for effectively marketing their products. With an in-depth investigation it was
found that the Pakistan’s textile industry can once again be brought back on winning track
if government takes serious actions in removing or normalizing the above mentioned hurdles.
Additionally, the government should provide subsidy to the textile industry, minimize the
internal dispute among the exporters, withdraw the withholding and sales taxes etc.
Purchasing new machinery or enhancing the quality of the existing machinery and
introducing new technology can also be very useful in increasing the research &
development (R & D) related activities that in the modern era are very important for
increasing the industrial growth of a country.

Introduction

Pakistan’s economy depends upon its various sectors out of which textile is the most
important sector because it contributes about 65 percent of our national exports, 46 percent of
Industrial production, 38 percent of employed Industrial work force and 9 percent of Gross
National Product (GNP), (Liaquat & Hassan, 2005). This sector has now gone through
transition, moved from Multi- Fibre Agreement (MFA) to the quota free regime governed by
WTO, effective from 2005. There are tremendous opportunities for countries that have
prepared themselves for this eventuality. The move to free trade means that only those
countries that have comparative advantage in textile will be significant players in
international textile market. In Pakistan, substantial investment has been made in this sector
over the last few years to capture these opportunities. Textile manufacturers and exporters of
Pakistan should be geared up to face challenges of quota free environment, (MTDF Medium
term development Framework 2005–10). Therefore it was found necessary to eliminate the
weaknesses and highlight the ways to improve the performance of our textile industry to
compete in the international market. In this connection this research is aimed at finding the
effects of trade liberalization on textile industry of Pakistan.

Cotton as Raw Material

Cotton is the primary significant cash crop in Pakistan. In the agricultural sector, it is
commonly referred to as "white gold" due to its potential to generate profits for farmers.
11
Cotton is essential to Pakistan's economy since it is the principal foreign exchange earnings
source that directly supports the country's gross domestic product (Shahzad et al., 2022). The
discovery and dissemination of novel germplasm and But cotton cultivars have recently
increased seed cotton yield. In addition, technological advances in cotton breeding and
production have benefited the entire industry. In addition to the historical increase in
production, various factors have led to the plateauing of cotton production (Masood et al.,
2022; Shuli et al., 2018). A number of factors influence Pakistan's cotton production.
Cotton's susceptibility to insects makes insect pests the most severe global constraint on
cotton productivity, which is managed mostly by applying pesticides. Insect pests, a scarcity
of high-quality seeds, cotton diseases such as cotton leaf curl disease, heat and drought stress,
labor-intensive harvesting, fluctuating cotton prices, and shifting cropping patterns are the
most significant problems in the cotton zone. This review examines the current condition of
production, cotton-based breeding techniques, germplasm development, and significant.
Production limits (Aslam et al., 2022; Fatima et al., 2022ab; Malik & Ashen, 2016).

The Textile Industry of Pakistan

The Textile Industry of Pakistan is the major player in the development of Pakistan’s
economy. It is considered to be one of the world’s leading cotton producers. Till 1997,
Pakistan was the world’s largest exporter of yarn followed by India. Pakistan was the second
largest exporter of textile made-ups, with Pakistan’s bed wear exports having acquired a 6
per cent share in the global trade of textile made-ups in 1999 (Kazmi, 2003). Globally, the
bed wear and linens sub sectors were the second largest in terms of production and exports,
with 28 per cent share of the total textile made-ups market in 1999 (SMEDA, 2002). Pakistan
was the second largest exporter, after China, of bed wear and linen with a 20.89 per cent
share of this sub sector in 1999, up from 13.65 per cent in 1995 (Fatima M., Ahmed E.,
2006).
In 1999-00 there were about 443 textile units, 8,477,000 spindles, 149,780 rotors and 9944
looms. In 2003-04 the number of units increased to about 456, Spindles to 9,590,000 rotors
to 146,640 and looms to 10,646. In 2005-06 again an increase in textile units 461, spindles
10,437,000, rotors 155,104 and looms 8747. Furthermore, in 2006-07 there were 567
units,
1198000 spindles, 11,809,000 rotors and 9000 looms (Mirza R. B., 2009). Furthermore, the
table 2.1 below describes the contribution of textile industry in Pakistan’s economy.

Contribution of Textile Industry in Pakistan Economy

12
 60% 54%
50% 46%
38%
40%

30%

8.50%
10%

Textile industry of Pakistan is comprised of Ginning, Spinning, Weaving, Knitting, Printing,

Processing, Dyeing, Hosiery, Made-ups and Garments. There are also some fully integrated
composite units which are the combination of all the process and production under one roof.
In Pakistan these sectors are mainly situated in Karachi, Lahore, Faisalabad, Hyderabad,
Kotri and Nooriabad. For conducting research the above sectors were lumped together into
four major sectors for compiling the qualitative data sectors shown in the textile value chain
diagram. The selected sectors were; spinning, weaving (including knitting), dying and
printing (including Processing and Bleaching) and Garments.

Ginning
Textile chain begins from Ginning. It adds value to textile by separating cotton from seed and
impurities. There are 1221 Ginning factories in Pakistan of which 1075 are in the Punjab
and the remaining 146 are in Sindh. The total capacity is approximately 20 million bales
per year (assuming a 100 day ginning season). Against capacity, the total production of
ginned cotton is 10.0 million bales suggesting an excess capacity of ginning in the country.
Ginning is the sector which is first in the process of value addition leading to readymade
garments or other textile products. Unfortunately, the ginning sector is out-dated and needs
modernization.

Spinning
Spinning is the foundation process and all the subsequent value additions i.e. Weaving,
Knitting, Processing, Garments and Made ups, depend upon it. Any variation in quality of
spinning product directly affects the entire textile value chain. This sector of Pakistan is old
and many of the units are as old as the time of partition. It is considered to be the most
important segment in the hierarchy of textile production. The major concentration of industry
is in Karachi, Hyderabad, Multan, Lahore and Faisalabad.

Weaving
Weaving is the textile art in which two distinct sets of yarns or threads, called the wrap and
the filling or weft (older woof), are interlaced with each other to form a fabric or cloth. The
warp threads run lengthways of the piece of cloth, and the weft runs across from side to side.
Weaving can be easier and harder. Easier weaving means to make cloth and other objects.

13
Threads or strands of material are passed under and over each other. Harder weaving is the
process of making cloth, rugs, blankets, and other products by crossing two sets of threads
over and under each other.
Today weaving ranks as a major industry in many countries. Weaving is often completed on
high speed looms. But weaving is not limited to cloth and textile products. Weaving plays an
important part in the manufacture of screens, metal fences, and rubber tire cord. Craft
workers also use varied fibres to weave baskets and hats.
The patterns in the weaving sector is comprised of hosiery, garments, towels, canvas, and
bed wear which are different from those of the spinning sector. The weaving sector has two
different sub sectors; Independent weaving units and Power loom units. Pakistan weaving
sector produces five categories of woven cloth that are; Grieg, Dyed, Printed, Blended,
Bleached. Major markets for Pakistani fabric are USA, EU, Hong Kong, China, Dubai and
Turkey.

Processing
The processing sector in the textile value chain holds an important position as far as value
addition is concerned. It has won world-wide recognition for producing cool and colorful
lawns, which cater for the fashion needs of the people, both at home and abroad. Other
fashion fabrics are silk, linen and man-made materials, which are generally blended with
cotton. Garments and made-ups comprising the downstream industry rely heavily on the
processing sector for the provision of value added fabrics and materials. More than 650 units
are in operations majority of which operate at a small and medium sized scale. These units
carry out processes including:
 Bleaching of Fabric
 Dyeing and finishing of fabric

 Printing and finishing of fabric1

Garments
The garment industry of Pakistan was started in 70’s. With the passage of time and
industrialization, this industry expanded very rapidly. Majority of units making cotton
fashion garments are medium and small-size in terms of machines, workers and output, with
a few notable exceptions and scattered throughout Pakistan2.
Garment industry has emerged as one of the important small scale industries in Pakistan. Its
products have large demand both at home and abroad. The local requirements of readymade
garments are almost wholly
met by this industry. Its exports in 1999-2000 stood at US $ 772 million or 8.5% of the
total exports. Garment industry is also a good source of providing employment opportunities
to a large number of people at a very low capital investment. It mainly uses locally produced

14
raw materials. Most of the machines used by this industry are imported or locally made and
assembled1.
All sorts of readymade garments are made from cotton fabric and synthetic fibre. The
production of garments and made-ups in Pakistan is concentrated mainly in Lahore,
Faisalabad, and Karachi. These three clusters have their own specialties as Faisalabad caters
more to Home textile, Lahore is the home of Knitwear, Karachi lives up to its reputation of
being the mini Pakistan. The bulk of these garments are mainly exported to developed
countries, like U.S.A., Europe, Japan and Australia. However, our country’s exported
readymade garments are inferior in quality in comparison with garments from India, Korea,
Hong Kong, Taiwan, Philippines and Sri- Lanka2.
Pakistan’s export of ready-made garment and apparel came up 5th position during 1999-
2000. Current position of this industry is not spirited especially the trade liberalization has
directed it to a point where it is extremely hard to stay alive because of numerous national &
international problems3.

World Trade Organization

The World Trade Organization (WTO) deals with the rules of trade between nations at
international level. It is termed as an organization for liberalizing trade, a forum for
governments to negotiate trade agreements and a place for them to settle trade disputes. It
operates a system of trade rules and is a system that helps the member governments in
sorting out their trade problems4.
The major purpose of WTO is to assist free flow of trade by removing obstacles.
Furthermore, the WTO’s work is dispute settlement. Trade relations often involve
conflicting interests. Agreements, including those painstakingly negotiated in the WTO
system, often need interpreting. The most harmonious way to settle these differences is
through some neutral procedure based on an agreed legal foundation.

That is the purpose behind the dispute settlement process written into the WTO agreements1.
The most important and fundamental principle of WTO is non- discriminatory treatment that
is known as Most Favoured Nation Treatment (MFN). Any advantage, favor, privilege or
immunity granted by one WTO member to another (such as lower customs duty to one) has
to be granted immediately and unconditionally to all other members 2. WTO rules oblige
member countries to ensure transparency in their foreign trade regimes by requiring them to
publish all laws, regulations, measures and administrative decisions affecting trade. The
publication of laws has to be done in a manner that allows importers, exporters, consumers
and investors to be aware of them. Transparency is also ensured by requiring member
countries to submit periodic notification to the WTO secretariat on different aspects of the
trade regime.

Trade Liberalization and Textiles

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Textiles are among the first manufactured products an industrializing economy produces.
They played a critical role in the early stage of industrialization in the United Kingdom, parts
of North America and Japan, and more recently in the export-oriented growth of the East
Asian economies (Yang and Zhong, 1998). Hong Kong (China), the Republic of Korea, and
Taiwan (Province of China) relied heavily on T&C products for their exports from the 1950s
to the mid-1980s. As these economies scaled up their industrial development toward more
capital-intensive and high-tech manufacturing products, Southeast Asian and South Asian
developing countries and LDCs started to join the race1.

Data Collection Methodology

In the first phase of study the qualitative data was collected in the form of unstructured
questionnaire from the textile industry of Pakistan. The main respondents of the questionnaire
were senior to middle level management located in Karachi, Hyderabad, Kotri, Nooriabad,
Faisalabad and Lahore. The major objective of the interviews was not only to collect the
information to document the different strategic factors, but also to examine the factors
influencing the success of textile industry of Pakistan in the quota free regime.
At the first stage, an e-mail invitation was sent out to the 100 textile mills, the address was
found from yellow pages and web site of APTMA. From the 100 e-mail addresses, 37 were
bounced and returned as either address unknown or not active anymore. Out of the remaining
63 respondents 48 agreed for the qualitative interviews in which respondents were met face
to face in textile mills located in different cities of Pakistan.

Data Analysis and Discussion Identified National Issues

High Cost of Production
In Pakistan the cost of production has climbed very high which has also affected the textile
industry. Some of the textile units have been shifted to other countries like Bangladesh & Sri
Lanka to avail the low cost benefit. The change in the prices of different factors and utilities
used in the production is shown graphically below:
High wage rates
Labor Wages

Pak Rs
3000 L
a
b

2005 2009

16 Year
 High gas charges

Rate of Gas (2005-09) S o u r c e : SSGC

400

300

Pak Rs 200

R
a
t
100 e

2005 2009

Year

High electricity charges

Rate of Electricity
(2005-09)
Source:

15

10
Pak Rs
R
a
5
t

0
2005 2009

Year

High oil prices

Rate of Diesel (2005-2009)

Source: OGDCL

63
70

48
60
17
50
Pak

30 R
a
t
20

10
 Change in Interest Rate on Bank loan
(Source: SBP)

20%

15%

I
n
t

5%

0% 2005 2009

High interest rate

Industrialists are highly risk averse

Industrialists of Pakistan are unwilling to take the risk of value addition. As there are several stages
in the textile chain and in every stage there are plenty of problems. So the owners of spinning &
weaving units are satisfied from whatever they get by only exporting yarn and fabric. They find their
earnings enough rather than taking the risks of going through complete textile chain even the
revenues from exporting finished product are four times higher.
Lack of training programs
There must be some training programs to bring awareness in the landlords & farmers so that they
may be able to produce cotton according to the required international standard and spinning units
to produce superior quality of yarn
R&D facility of 6% has been withdrawn
R&D is the most valuable instrument to provide awareness about the international brands and we
can also introduce new brands that should be parallel and equivalent to the international brands.
No collective method for solving the industrial problems
There is no one capable enough to come in front and talk for the industry rights internationally
because everyo ne is busy in trying for his own survival. There are no any united ways of
dissolving the textile industry problems.
Changing name from EPB to TDAP is not the solution
Solutions may not depend on changing the name from EPB. (Export Promotion Bureau) to TDA
(Trade Development Authority), because the faces are same only the designations have changed.
The main story is about the innovative policies that have been prepared since very long but still
unimplemented.
18
Textile / Garments City project can be a powerful tool
Textile/Garments City project in Karachi has thought out by some policy makers to be a great
move towards the up gradation of textile industry but when estimated practically it has been found
ineffective. This project is expected to destroy our running business and consequently, will affect
the economy. There is already a limited availability of resources that are not enough for our
existing industry. Therefore, this project is predicted to eat up all the existing resources that are
utilized by current factories. Affecting the current running industry means decreasing the source of
employment and remaining export earnings that has already declined.
Industrialist shifting business to other countries
The major issue is the current situation of the country, as the industrialists always have a tension
and stress that anything unusual may occur unexpectedly. Furthermore, due to the economic
instability the investors are unwilling to invest in our country. Therefore most of the investors have
shifted to other countries
Lack of funds
In the current situation of trade liberalization it is very much important to grow in parallel with the
other competing nations, this requires not only equivalent but even more amounts of funds that are
missing in the story of our textile industry because whenever Government plans for huge
amounts of investment the banks are in short of funds and sometimes due to a change in political
scenario funds were blocked till the new policy from the newly established Government is
announced.
Labors shifting to other countries
There is a high inflation in Pakistan and the wages of labor are very limited. Furthermore, the
skilled labors are disheartened due to the frequent closure of many textile units in Pakistan. The
textile units which are trying to survive have reduced the number of labors as well as started hiring
people on low wage rates. Therefore, most of the skilled labors have moved to other countries i.e.
Saudi & UAE.
There is a huge paper work which takes a great time
If a factory is willing to export, it has to go through a lengthy procedure that requires a huge
paperwork. It takes a great time to complete the documentations. Due to such delays the orders are
cancelled.
Lack of interaction between Industry & Academia
One of the most important problems faced by the textile industry of Pakistan is the lack of
interaction between industry and academia. Universities are the place where research is conducted
on regular basis on the current ongoing issues, which is very much helpful to solve problems and
provide innovative polices to bring drastic changes to compete with in current situations. But
unfortunately there is no any linkage between them.

19
Constraints for the Industry
There are some Government departments that serve as constraints in the success of textile
industry of Pakistan. According to the industrialists these departments do not only serve as a
constraint but rather are evils for the industry. These departments are; EOBI (Employees Old-age
Benefits Institute), Fire, CDGK (City District Government of Karachi), Civil defense, Sales tax,
Customs, Income tax, EDF (Export Development Fund).

Identified Global Issues

Removal of Quota
Removal of quota is the major issue that has affected the textile exports. Before the quota free
regime each country was assigned a quota that they were easy to fulfill. Removal of quotas
provided an open competition; the race in which only those were able to win that prepared
themselves according to the rules and regulations of WTO.

Awareness about the trade liberalization

For most of the local industrialists trade liberalization seemed to be a confused and disastrous era.
They were able to cope up with the situation if they were properly educated in advance.

Worse image of Pakistan internationally

Country’s international image is very important for international trade. But Pakistan’s international
image has worsened resulting in reduction of export orders. Foreign buyers are unwilling to come
to Pakistan. They have found other potential markets such as Bangladesh, Srilanka, India and
China thus the number of orders for Pakistani textile mills have declined.

Restriction of EU to buy raw material from them

During the post quota era the textile industry used to procure raw material from china or other
countries where it was cheap, but now the EU has restricted through some quality issues to buy the
raw material from him.
Therefore, we have shifted from Chinese & other underdeveloped countries raw materials to EU
expensive raw materials otherwise we are threatened that our orders will be cancelled. This has
again increased the cost of production (these raw materials were colors & dyes).

20
Lack of ETP (Effluent Water Treatment Plant)
Internationally the export of processed cloth from a factory without ETP is not acceptable
internationally in the era of trade liberalization. In Pakistan most of the factories do not have ETP.
Those who are using found it very much expensive and that still it is not equivalent to the
international standards. Only about 2 to 4 per cent of the mills may have the ETP which are
according to the international standards.

Evaluation of factory
In the pre quota era there was no any evaluation of the factory by the international buyers. Now
international organizations come to audit the factory and charge audit fee that is very high. Initially
there was only one audit but now there are even more e.g.; First audit is “A class” then “B class”
and even then “C class” audit and so on, hence the parameters have increased. In garment sector
“Garment tests” are also conducted. They are conducted in other countries like Singapore, Thailand
etc. An example is a IKEA which is an all-rounder factory of Sweden which conducts these type of
audits audits. It is believed that these are all hurdles for the textile industry.

Delay in delivery
Foreign buyers have become more time conscious. Nowadays due to a delay in delivery they may
cancel the order. Sometimes penalties are also paid on delay. Sometimes the shipments are sent
back because of delay.

Lack of diversification in the direction of trade

Most of the exports from Pakistan are reserved for EU and US, after the presentation of policies by
WTO our exports have declined. The reason is much better quality products from the competitors.
Therefore the textile industry of Pakistan should change the direction of trade by finding out the
other potential markets rather than depending on the two traditional markets of EU and US.

Only developing country to sign the ILO conventions completely

Pakistan is the only country in the underdeveloped world that has signed the ILO conventions
completely but we are incapable to apply them, consequently our exports are affected.
Millions of dollars spent to destroy Pakistan’s image internationally

21
The competitors have spent lots of money to destroy Pakistan’s image in the international markets.
It is expected that the reason behind the terrorism and worse law and order situation of Pakistan is
a part of planning of competitors, so that the foreign buyers may not even think to conduct business
with Pakistan. Plus the international media has also played a negative role to destroy Pakistan’s
image.

Quality Issues
In terms of international standard major issue is faced by our Garments industry because they are
supposed to send every item used in the finished product i.e. Zip, Button, Thread, and Labels etc.
to the International Quality & Standard verifying companies abroad to confirm that it does not
carry any substance harmful to human skin which is a very expensive process

Labor-intensive production
In the post quota regime exports from Pakistan are also subject to restrictions due to the highly
labor-intensive production.

Increase in the foreign buyers’ check

The removal of quotas has brought plenty of opportunities for the international buyers. They can
purchase from any country. Therefore they have started checking the product with more efficiency.
For example if in the pre quota era the product having 10 defects was ignorable but now even five
defects aren’t ignorable.
E.g.: There was a full container of bonanza garments it was sent back in claim. There was no any
defect in the garments but because the cloths were fallen from the sequence.

Imposition of antidumping duties

EU imposed a punitive import duty on Pakistani bed-linen in 2004; it accused exporters of
dumping bed-linen below cost prices at the European market. This move was believed to be the
retaliation of EU to Pakistan for upgrading its commercial air fleet with US-American Boeings
rather than with European Airbuses. Furthermore, here was an imposition of 13.10 per cent anti-
dumping duty by EU in 2005 and again an imposition of 5.7 per cent anti-dumping duty in 2007-
08. Here the most noticeable thing is that no other country pays the antidumping duty only Pakistan
pays due to lack of political influence because of weak political system. There is no one available
to talk internationally.

Preferential treatment to the competitors (GSP)

22
The European Commission provides preferential treatment of import duty waver to the
countries from which it trades. Pakistan received a benefit initially due to a special
scheme to combat drug production and trafficking that expired in 2005. Since then
Pakistan is paying the duties but the competing countries like Bangladesh and Sri Lanka
are allowed duty free access to the EU markets. Bangladesh, for example, obtains zero
per cent duty access to the European market due to its least developed country status.
Sri Lanka equally does not pay import duties due to specific incentives for countries
having ratified certain conventions on sustainable development and good governance.

Competitors are much stronger

There is a huge support to the other countries by their Governments. In Netherlands
textile units are 100% supported by the Government. In china the sample room of the
small factory is bigger than our whole factory. Bangladesh has 25% price as comparable
to us means we are 75% higher than our competitor. That is why they have penetrated
the world market of value- added textiles, as China fully avails WTO quota free
benefits. It has become the world largest exporter of textiles

Crisis of Textile Industries

The Pakistan textile industry total export is around 9.6 billion US dollars. The textile
industry contributes approximately 46 percent to the total output or 8.5 percent of the
country GDP. In Asia, Pakistan is the 8th largest exporter of textile products providing
employment to 38 percent of the work force in the country. However, the textile
industry currently faces massive challenges. The All Pakistan Textile Mills Association
(APTMA) needs to enhance the quality of its products. However, APTMA argues other
factors such as high interest rates and cost of inputs, non-conducive government
policies, and non-guaranteed energy supplies hinder their competitiveness

History of Pakistan Textile Industry

Increase in the cotton production and expansion of textile industry has been impressive
in Pakistan since 1947. Cotton – bales increase from 1.1 million bales in 1947 to
10 million bales by 2000. Number of mills increased from 3 to 600 and spindles from
about 177,000 to 805 million similarly looms and finishing units increased but not in the
same proportion. Pakistan’s textile industry experts feel that Pakistan has fairly large
size textile industry and 60-70% of machines need replacement for the economic and
quality production of products for a highly competitive market. But unfortunately it
does not have any facility for manufacturing of textile machinery of balancing
modernization and replacement (BMR) in the textile mills. We need to think about joint

23
ventures for the production of complete spinning units with china, Italy and production
of shuttle less looms with Korea, Taiwan and Italy.
Reflecting on the state of affairs, Abid Chino, Pakistan cloth merchants Association
(PCMA) Chairman, Appreciated government’s efforts to encourage new exports
and finding new markets, which need aggressive export marketing. The steps taken on
the monetary front, such as the frequent devaluation of Pak rupee in terms of dollar
could not improve the cost competitiveness of exportable products due to increase in
prices of the local and imported inputs of the local textile industry. During the period
1973 to December 1992, some 71 spinning units with 1,136, 835 spindles, 6,600 rotors
ends 7,329 looms were closed down. In 1992, a foreign consultant form was hired
by the government to look into the stagnate conditions in the 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 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 to 57.4%
from 53.9% in 2002 which is 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 fine anything that could lead to a high
level exports achievement and remove trade imbalance.
Pakistan’s textile sector earned US$5.77 billion during the 2003 year, compared with
US$5.577 BILLION OF 2000-2001 indicating a growth of 0.69%. The total exports of
textile sector in 2004 were US 5.7 billion which shows 2.5% growth it increase to 4%
growth in 2005 as compared to 2004.The textile sector shows 8% negative growth in
2006.The negative growth continue in 2007 aslo with the value of 5%.The textile sector
shows 15% growth in 2008. Now we will discuss the main reasons of crisis in textile
industry step by step in detail

a. Lack of Research & Development (R&D) in Cotton Sector

The lack of research & development (R&D) in the cotton sector of Pakistan has resulted
in low quality of cotton in comparison to rest of Asia. Because of the subsequent low
profitability in cotton crops, farmers are shifting to other cash crops, such as sugar cane.
It is the lack of proper R&D that has led to such a state. They further accuse cartels,
especially the pesticide sector, for hindering proper R&D. The pesticide sector stands to
benefit from stunting local R&D as higher yield cotton is more pesticide resistant.

b. Lack of Modernize Equipment

24
Moreover, critics argue that the textile industry has obsolete equipment and machinery.
The inability to timely modernize the equipment and machinery has led to the decline of
Pakistani textile competitiveness. Due to obsolete technology the cost of production is
higher in Pakistan as compared to other countries like India, Bangladesh & china.

c. Finance Bill to Burden Industry Further

All Pakistan Textile Mills Association (APTMA) has told that government’s actions are
not matching with its words for the textile industry. Referring to the Prime Minister
Yusuf Raza Gilani speech at the launching ceremony of the Infrastructure Development
of the Pakistan Textile City at Port Qasim Industrial Area, where Prime Minister spoke
high of the textile industry contribution towards the country’s economy, Chairman
APTMA Tariq Mehmood said the federal budget 2009-10 is a total negation of the
acknowledgement of the role of textile industry on the part of the Prime Minister.
According to him, reintroduction of minimum tax on domestic sales would invite
unavoidable liquidity problem, which is already reached to the alarming level. He
said the textile industry was facing negative generation of funds due to unaffordable
markup rate on the one hand and acute shortage of energy supply & unimaginable
power tariff for industry.

d. Increasing Cost of Production

The cost of production of textile rises due to many reasons like increasing interest rate,
double digit inflation & decreasing value of Pakistani rupee. The above all reason
increased the cost of production of textile industry which create problem for a textile
industry to compete in international market.

e. Internal issues pose a Larger Threat for Pakistan’s Textile Industry

Pakistan’s textile industry is going through one of the toughest period in decades. The
global recession which has hit the global textile really hard is not the only cause for
concern. The high cost of production resulting from an instant rise in the energy costs
has been the primary cause of concern for the industry. Depreciation of Pakistani rupee
during last year raised the cost of imported inputs. In addition, double digit inflation
and high cost of financing has seriously affected the growth in the textile industry.
Pakistan's textile exports have gone down during last three years as exporters cannot
effectively market their products since buyers are not visiting Pakistan due to adverse
travel advisory and it is getting more and more difficult for the exporters to travel
abroad.
Textile exporters rightfully demand reduction of Kibor rate to 8% to avoid a severe
decline in exports. A three-year comprehensive textile policy is expected to be
25
announced before budget 2009-10. The textile policy has been designed to enhance the
exports of textile sector to $ 25 billion in next three years. This was stated by the
Minister for Textile Industry Rana Farooq Saeed Khan. Textile Minister further
informed that the spinning and weaving sector would get its due share from the Export
Investment Support Fund, worth Rs. 40 billion allocated in the Federal Budget 2009-10.
Rana Farooq pointed out that he has advocated the case of immediate support to
textile industry in the Parliament and also in the Cabinet meetings because he is
confident that only textile industry was capable enough to bale out Pakistan from the
current economic crisis. He further said that although we are 4th largest producer and
3rd largest consumer of cotton but unfortunately now we are at number 12 in the
international trade of textile products. Additionally, he stressed that government should
take immediate measures to remove slowdown in the textile sector. He said that high
cost of doing business is because of intensive increase in the rate of interest which has
increased the problems of the industry. He said that record increase in markup rates is
one of the major cause of defaults in servicing the loans availed by the industry, hence,
the volume of non-performing loans has reached to an alarming situation. He said that
power shut downs may result in massive unemployment resulting in law & order
situation.

f. Energy Crisis

 Electricity Crisis
As a consequence of load-shedding the textile production capacity of various sub-
sectors has been reduced by up to 30 per cent. The joint meeting of APTMA & other
related organization was held at APTMA House to formulate a joint strategy to address
the alarming electricity crisis being faced by the textile industry. The meeting
unanimously decided to constitute a joint working group of electricity management for
the textile industry in the larger interests of the value chain of the textile industry. The
joint working group will meet shortly to design a detailed plan to pursue the following
goals; immediate total exemption from Electricity load shedding for the textile industry
value chain; Rationalization and reduction of electricity tariff.
The load-shedding of electricity cause a rapid decrease in production which also
reduced the export order. The cost of production has also risen due to instant increase in
electricity tariff. Due to load shedding some mill owner uses alternative source of
energy like generator which increase their cost of production further. Due to such
dramatic situation the capability of competitiveness of this industry in international
market effected badly. Fig. 1. Illustrates comparison between electricity production and
consumption.

26
 Figure 1: Comparison between Electricity Production and Consumption

 Gas Shortage
Gas load-shedding continues in Punjab and NWFP despite a significant increase in
temperature. A spokesman for the All Pakistan Textile Mills Association (APTMA)
claimed that 60 to 70 per cent of the industry had been affected and was unable to
accept export orders coming in from around the globe. He said the textile industry
had already endured over 45 days of gas disconnection over a period of four months,
causing extraordinary production losses and badly affecting capability of the industry.
In Punjab, he said, energy supply disruption only was causing an estimated loss of Rs1
billion per day. In the larger interest of the economy and exports, he suggested, the
government should “ensure utility companies provide smooth electricity and gas supply
to the textile industry”.

g. Tight Monetary Policy

The continuity of tight monetary policy cause an intensive increase in cost of
production. Due to high interest rate financing cost increases which cause a severe
effect on production. The withholding tax of 1% also effect the production badly. The
high cost of doing business is because of intensive increase in the rate of interest which
has increased the problems of the industry. The government should take immediate
measures to remove slowdown in the textile sector.

27
 h. Removal of subsidy on Textile sector
The provisions of Finance Bill 2009-10 are not textile industry friendly at all.
Provisions like reintroduction of 0.5% minimum tax on domestic sales, 1% withholding
tax on import of textile and articles etc., are nothing but last stick on industry’s back.
Reintroduction of minimum tax on domestic sales would invite unavoidable liquidity
problem, which is already reached to the alarming level. The textile industry was facing
negative generation of funds due to unaffordable markup rate.

i. 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. There is a continuous trend of investing
in spinning since many years. Pakistan’s textile industry estimates that around Rs1, 400
billion (US$32 billion) of investment was required till 2010 in order to achieve the
government's export target." Pakistan is facing externally as well as internally problems
which restricts the new investment. The unpredictable internal condition of
Pakistan causes a rapid decrease in foreign investment that affected all industries but
especially textile industry.

j. United States & EU cuts imports of textile from Pakistan

United States cancel more than 50% of textile orders of Pakistan .US also impose a high
duties on the import of textile of Pakistan which effect the export in a bad manner. US
& EU are the major importer of Pakistan textile which creates a huge difference in
export of Pakistan textile after imposing a restriction on import of Pakistani textile
goods.

k. Raw material Prices

Prices of cotton & other raw material used in textile industry fluctuate rapidly in
Pakistan. The rapid increase in the price raw material effects the cost of production
badly. The increase in raw material prices fluctuate rapidly dur to double digit inflation
& instable internal condition of Pakistan. Due to increase in the cost of production the
demand for export & home as well decreased which result in terms of downsizing of a
firm. Hence the unemployment level will also increase. Government should take serious
step to survive the textile industry. In order to decrease the price raw material for textile
we need to increase our production capability. Simultaneously, the government should
make arrangement for introducing international system of Cotton Standardization in
Pakistan to enhance quality and value of Pakistan lint cotton by utilizing the technical
services of Pakistan Cotton Standard Institute.

28
l. Export Performance of the Textile Sector
For the second year in a row, the country missed annual textile export target of 12
billion dollars by 20 percent due to high cost of production, power shortage and stiff
competition with regional players. The federal government envisaging 15 percent
growth had set textile export target of 12 billion dollars for FY09 against 10.35 billion
dollars for FY08. However, in FY09, the country not only missed its textile export
target but also registered a decline of some 6 percent as compared to FY08. "Yes, the
country has fallen short of textile export target by over 2 billion dollars due to the global
meltdown and several barriers faced by textile industry on the domestic front," said
Mirza Ikhtiar Baig, Prime Minister's Advisor on Textile. Ikhtiar said that high cost of
doing business, power shortage; poor industrial infrastructure and slow external demand
are some major factors contributing to the decline in textile export. However, he is
confident that during the current fiscal year textile sector will show better performance
as the government is trying to remove the tariff barriers, besides exploring new textile
export markets. "I am confident that the governments and the Ministry of Textile's
efforts will be helpful in boosting the country's textile export and enabling it to compete
with other regional competitors like India and China," Baig said.
Additionally, the official statistics of the State Bank of Pakistan (SBP) show that the
country's textile exports is also some 2.36 percent lower than the export of fiscal year
2006-07, in which overall textile exports as per receipts stood at 10.011 billion
dollars. The central bank has also revealed that out of 12 major textile export 9
registered negative growth and export of only three items - raw cotton, bed wear and
towels has posted some increase. With 18.34 percent decline, readymade garments
exports stood at 983 million dollars and knitwear export at 2.054 billion dollars after a
decline to 4 percent in FY09. Fig. 2. Shows comparison of Pakistan Textile Exports in
(US$bn) for different fiscal years.

Figure 2: Pakistan Textile Exports in (US$bn) for different fiscal years

29
 m. The Effect of Global Recession on Textile Industry
In economics, the term ‘recession’ means “The reduction of a country’s Gross
Domestic Product (GDP) for at least two quarters; or in normal terms, it is a period of
reduced economic activity.” Pakistan is 26th largest economy in the world, and 47th
largest in terms of the dollar. It is sad to see our economy like this now. Pakistan is
actually a very economically diverse country with boasting industries of textiles,
agriculture, etc.
The main reason for this slump has largely been the political instability over the past
few years; no proper economic policies were implemented; at least none that succeeded.
This caused a very high rate of inflation, which, in 2008, had increased to a whopping
25% as compared to a 7.9% of 2006. What occurred afterwards is what we call the
domino effect. The value of the Rupee crashed from 60-1 USD to 80-1 USD in only a
month, the prices of commodities soared through the roof, the number of people living
below poverty line increased from 60 million to 77 million, and consequently, the
working class layman became virtually deprived from basic necessities like water,
wheat, electricity, natural gas, and cooking oil; add to all this, the preposterous amounts
of load-shedding, and what we get is a nation in shambles.
The above all situation of the economy badly affected the textile industry also. The
demand for textile product cut down locally & internationally as well. The export order
reduced due to unpredictable conditions of Pakistan & political instability. The cut
down in the production of textile cause further unemployment level which decrease the
living standard of peoples.

n. Effect of Inflation
Inflation rate is measured as the change in consumer price index (CPI).Inflation is
basically a general rise in the price level. It is decline in the real value of money.
Inflation can have adverse effect on economy. Pakistan is one of prey of inflation. It still
faces high double digit inflation. The increase in inflation causes the increase in the cost
of production of textile good which return in downsizing. The double digit inflation
cause reduction in exports of textile.
o. Unemployment Caused by Textile
Unemployment occurs when a person is available to work and seeking work but
currently without work. The unemployment rate in 2006 was 6.6 per cent which
decreases 0.1 percent in 2007. The unemployment rate reaches to 7.5 per cent in 2008
due to global crisis. As the LSM decrease the production that’s why the unemployment
level rises very rapidly. The rise in unemployment level is 11 per cent in 2009. The
unemployment rate in textile industry was very high during the current fiscal years

30
because of recession & increasing cost of inputs & fluctuating situations of country.
Year wise comparison of inflation and unemployment with the time can be seen in Fig.
3 and Table 1.

Figure 3: Inflation and Unemployment VS Time

Table 1: Details of Inflation and Unemployment Rates

Year Inflation Unemploym Date of

rate ent Rate % Information
(consumer
prices)

31
 2000 6% 7% 1999 est

2001 5.2% 6% 2000 est

2002 4% 6.8% 2001 est

2003 3.90 % 7.8% 2002 est.

2004 2.90 % 7.7% 2003 est.

FY03/04 est.
2005 4.80 % 8.3% 2005 est.

2006 9.10 % 6.6% 2006 est.

2007 7.90 % 6.5% 2007 est.

2008 23.0 % 7.5% 2008 est

17.2%
2009 11%

Recommendations
The government is considering curative measures on the recommendations of stakeholders to
address the problems and issues faced by the textile industry of the country for enhancing its
production and exports. The government is likely to announce textile policy also called
National Textile Strategy in the mid of current month to help promote the textile sector of the
country, sources told APP. For the purpose of this, the Textile Ministry has consulted all textile
sector associations and the chambers of commerce and industry. The ministry received
recommendations for zero rating on import of textile machinery, zero rating exports, tariff
reduction, incessant energy supply to textile units. Issues relating to the market access and
quality products with timely delivery and single digit mark up and special power tariff for the
textile industry has also been recommended.
It has been suggested that textile policy might include the issue like duty free market access to
European Union and United States as Pakistan is the largest importer of USA long staple
cotton to the tune of $400 million to $500 million every year. In addition, the economic
observes believe that the textile sector was passing through a difficult phase due to energy
shortage in the country and needed curative measures for promotion.
Some other Specific Recommendations are given as under:

 Remedy though Foreign Direct Investment (FDI)

 Image Building of Pakistan to Attract Foreign Direct Investment (FDI)

 Focus on Value Addition

 Technology Up-gradation & Capacity Building

32
 Human Resources Development

 Reducing the cost of doing Business in Pakistan

 Need for Improving Textile Production

 Improvement in productivity

 Awareness of International Quality Standards

 Introducing concept of on-the- job-training

 Introducing efficient management techniques

 Subsidy removal should be taken a back

 Interest rate should be low down in order to survive this industry

 Electricity & gas tariff

 Removal of Energy Crisis

 Exploration of new Export Markets

Current Situation of Cotton

Phenotype-based cotton breeding's restrictions

In Pakistan, acceptable genotypes are often developed by traditional breeding techniques.

Many screening techniques are utilized to pick the best potential parents for crossing, as shown
in figure 1. Multiple crossings are performed to produce a useful variation. Sometimes a small
number of mutagenesis has employed to acquire the desired mutation. Backcrossing, recurrent
selection, pure line selection, pedigree, and mass selection are routinely used to select and fix
desired traits. One of the most important selection factors is the phenotypic expression of the
progeny's desired characteristics under different environmental settings (RAZZAQ et al.,
2021). In addition to its outstanding efficacy, the phenotype- based method of cotton breeding
has significant drawbacks. Phenotype-based selection often yields the greatest outcomes for
qualitative traits influenced by various environmental factors. Due to the low heritability index,
the phenotype-based selection is typically ineffectual for quantitative factors such as cotton
yield (Aslam, 2016). In addition, phenotypic evaluation of the vast majority of cotton cultivars
subjected to environmental factors is unreliable. Due to the influence of recessive genes or
environmental influences, some recessive traits may not be detectable at the phenotypic level,
making recessive trait selection even harder (Abbas, 2020). The lack of selection tools during
the early segregation generations is a significant impediment to phenotype- based cotton

33
breeding. As a result, more resources are gradually allocated to enabling many cycles of
propagation advancement and selection. Six to ten years will pass before cotton recovers its
homozygous properties. These effects have a detrimental impact on the genetic makeup of
improved cultivars, hence diminishing the breeding effectiveness (Shabbir & Yaqoob, 2019).
To produce top genotypes, -breeding parents must be genetically and physiologically
exceptional. Identifying superior parental material remains challenging in phenotype-based
cotton breeding programs. Parental selection includes general and specific combing ability
tests administered in various situations, necessitating additional screening cycles, resources,
and time. In contrast, using genetic markers to evaluate the genetic diversity of inbred parents
is an effective method for selecting superior inbred lines (Kouser et al., 2019).

Figure 1: Different breeding and selection methods based on phenotype

Insufficient germplasm
All breeding programs are dependent on the genetic diversity of their breeding stock. It
differentiates genetic differences and similarities among genotype, strain, and germplasm
groups (Bakhsh et al., 2016). Consequently, plant breeding materials can be identified based on
an estimate of genetic diversity. Previous research has shown that the Gossypium genus
contains a wide range of genetic diversity in plant structures, leaf pubescence, leaf
morphology, flower colour, pollen colour, boll size, yield, fibre quality, early maturity, and
stress resistance. Most cotton breeders in Pakistan performed crosses with legally recognized
locally suited cultivars to produce new cultivars. Diverse breeders combined cultivars that were
closely related to develop the desired cultivars. These breeding strategies resulted in genetic
similarity among cultivars, hindering cotton breeding progress (Shahbaz et al., 2019). On the
other hand, hybridization between parents with various genetic makeup permits the formation
of usually acceptable and stable mutations. Previous research has showed that the genetic
diversity of Pakistan's cotton farmers is limited. Due to a lack of genetic variety, cotton leaf
curl virus was able to spread (Karar et al., 2020) rapidly. High genetic similarity in breeding
led to decreased cotton output and susceptibility to diseases, pest insects, and environmental
variations (Spielman et al., 2015). Researchers are compelled by these limits to analyze and
characterize novel cotton germplasm resources. Cotton germplasm resources are indispensable
for creating novel genetic fusions for agronomic, yield, fibre quality, and tolerance to biotic
34
and abiotic stresses (Wei et al., 2020). Like other major cotton-producing nations, Pakistan has
a long history of acquiring, preserving, and maintaining cotton germplasm. Some genetic
resources of cotton in Pakistan National Agricultural Research Centre (NARC), Cotton
Research Station (CRS) and Central Cotton Research Institute (CCRI) shown in figure 2.
Adoption of genetic variants from core germplasm is necessary for the long-term viability of
cotton production. Cotton has difficulty utilizing germplasm using conventional breeding
techniques. High- throughput genetic diversity mapping can support the identification of
important cotton germplasm resources in Pakistan (Saleem et al., 2016).
Marker-based breeding
In genome fingerprinting and marker-assisted selection (MAS), molecular markers enable
molecular characterization and genetic diversity detection (Noreen et al., 2016). Because
molecular markers are not always related to an organism's phenotypic manifestation, they are
essential to genomics research (Khan et al., 2015). The most significant molecular markers
in cotton genomes include Inter Simple Sequence Repeats (ISSRs), Amplified fragment length
polymorphism (AFLP), Single Sequence Repeats (SSRs), Random Amplified Polymorphic
DNA (RAPD) and Restriction Fragment Length Polymorphism (RFLP), as shown in figure 3.

These markers have been utilized to build linkage maps in numerous mapping populations.
According to the study, DNA markers have been related to over 29 essential features, including
fibre yield and quality, leaf and flower morphology, trachoma density and disease resistance
(Ali et al., 2019).
Genomic-based breeding

Crop improvement increasingly makes use of high throughput sequencing technology. The
developments in molecular genetics, bioinformatics, genetic engineering, whole genome
sequencing, and re-sequencing have considerably benefitted plant breeding. The complete
cotton genome was recently sequenced and made available to scientist’s worldwide (Rehman
et al., 2015). Knowing how genes affect phenotypes makes it simpler to modify a single
attribute than a combination of traits (Khan et al., 2020). Due to its low cost and speed, next-
generation sequencing has been utilized to analyze plant genomic and transcript changes. DNA
microarrays are less effective than RNA sequencing for detecting variations in gene expression
(Bakhsh et al., 2017). Recent studies on short RNAs, DNA methylation, transcriptomics,
proteomics, and metabolomics indicate that molecular markers and differentially expressed
genes (DEG) are associated with varied cotton quality traits (Imran et al., 2018). Several
crucial approaches to improve the efficiency of cotton breeding in Pakistan have already been
analysed. Massive genomic database accessibility improves the application of molecular
techniques. Due to genome- wide association studies, cotton breeding and genomics research
has advanced substantially (GWAS). Using this technique, many SNPs highly related to the
important traits are found effectively (Kouser & Qaim, 2015). Due to the genetic definition of
b r e e d i n g q u a l i t i e s , b r e e d e r s a r e n o w b e t t e r equipped to pick genotypes with
superior characteristics. GWAS and genomic selection use genotyping-by-sequencing (GBS)
methods because they are straightforward and affordable (Arshad et al., 2021). Utilizing
35
genome-wide association analysis has assisted in identifying candidate SNPs in Pakistan that
are significantly linked with cotton yield, fibre quality, and stress tolerance. Breeders were able
to establish how desired traits are controlled genetically, allowing them to circumvent
screening limitations. Thanks to functional genomics research, it is now possible to discover
the precise role of candidate genes. Genome editing effectively uses clustered regularly
interspaced short palindromic repeats (CRISPR/Cas), RNAi, Transcription activator-like
effector nucleases (TALENs), and Zinc-finger nucleases (ZFNs) (figure 4). Agrobacterium-
mediated genetic transformation is Pakistan's most common method of creating transgenic
cotton lines. A secondary objective of the breeding program was to generate trustworthy triple
transgenic cultivars. It is anticipated that these cutting-edge cotton cultivars would generate
risk-free cotton crops. Given the method's success in other nations, it has been suggested that
the CRISPR/Cas system be utilized in Pakistan's cotton agriculture alongside other breeding
techniques to combat the multiple strains of cotton leaf curl virus (Farooq et al., 2015). To
generate exact target genotypes in cotton, modern genome editing technologies are required.
Hybrid cotton

It can boost crop output and quality by introducing fixed heterosis into hybrid breeding.
Typically, during heterosis, hybrid offspring surpass their inbred parents in terms of growth,
biomass, yield, quality, and resistance (Abdelhameed & Emam, 2022). Significant heterosis in
cotton productivity and fibre quality assessments emerges from mating genetically superior
inbred parents (Hansora et al., 2015). In hybrid breeding, genetic markers must be utilized to
select parents with optimal combining ability, yield, and performance in hybrid combinations
(Shahzad etc.
al., 2019; Munir et al., 2022). China and India have utilized artificial pollination and
emasculation to produce hybrid cotton seeds regularly. Artificial pollination and emasculation
are insufficient to maintain the integrity of hybrid seeds, notwithstanding the higher cost of
seed production. The cytoplasmic male sterility (CMS) system is the most efficient means of
developing hybrid cotton seeds (Mohan et al., 2016). In light of the significance of hybrid
cotton, numerous scientists have advocated for the commercialization of hybrids. Elite hybrids
were developed, which cut seed production costs, increased yield and quality, enhanced disease
resistance, and prompted greater use of hybrid cotton (GAO Et Al., 2016). In Pakistan, hybrid
cotton agriculture is indispensable. Phenotypically and genetically pure cotton seeds lessen the
challenges created by seed impurity. Hybrid cotton provides superior fibre quality and stress
tolerance, can be grown in a broader temperature range and produces a greater yield.
Additional advantages of hybrid seed production include uniform maturity and higher
profitability. Pakistan has developed only three hybrid cotton cultivars to date, but poor seed
care standards and high seed production costs impede the creation of new hybrid cotton
cultivars. Additionally, the paucity of commercially available hybrid cotton seed is a
considerable obstacle. Notably, developing hybrid breeding procedures based on CMS can
facilitate and reduce the cost of hybrid seed production. Utilizing elite hybrids commercially is
another option for advancing hybrid cotton agriculture. Cotton rationing can reduce the cost of
producing F1 seeds, utilize heterosis, and maintain male-sterile lines for an extended duration
(Zhu et al., 2019).

36
Progress of mechanization
Effective agricultural mechanization is determined by the move from hand tools to implements
drawn by animals to mechanical power technologies, affecting mechanization capacity and
farm operating time requirements (Chaudire et al., 2022). Pakistan produces tractors, front-end
loaders, wheat and maize thrashers, potato diggers, and various machinery. It is common
practice to refurbish obsolete foreign rice milling and ginning equipment. A wide variety of
agricultural machinery and equipment are produced locally. Moreover, t h e i r o u t p u t h a s
i n c r e a s e d dramatically in recent years.
Additionally, a portion of them is exported. However, following trends is difficult in cotton.
Modern countries enhanced their cotton production by shifting manual and mechanical
harvesting. But unfortunately, in Pakistan, all cotton-grown producers prefer manual harvesting,
which increases the cost of production and yield losses (Mudasir et al., 2021).

Conclusion:
Pakistan’s textile industry is going through one of the toughest periods in decades. The global
recession which has hit the global textile really hard is not the only cause for concern. Serious
internal issues also affected Pakistan’s textile industry very badly. The high cost of
production resulting from an instant rise in the energy costs has been the primary cause of
concern for the industry. Depreciation of Pakistani rupee during last year which has
significantly raised the cost of imported inputs. Furthermore, double digit inflation and high
cost of financing has seriously affected the growth in the textile industry. Pakistan's textile
exports in turn have gone down during last three years as exporters cannot effectively market
their produce since buyers are not visiting Pakistan due to adverse travel conditions and it is
getting more and more difficult for the exporters to travel abroad. Pakistan’s textile industry is
lacking in research & development (R & D).The production capability is very low due to
obsolete machinery & technology.
Pakistan is facing high cost of production due to several factors like the hike in electricity
tariff, the increase in interest rate, energy crisis, devaluation of Pakistani rupee, increasing cost
of inputs, political instability, removal of subsidy & internal dispute. The above all factor
increase the cost of production which decreases the exports. Exports receipts decrease from $
10.2 B to $ 9.6 B. The global recession also hit badly the textile industry. Double digit inflation
also caused decrease in production in textile sector which cause the increase in unemployment
level.
By the removal of subsidy the industry’s production get higher effected which prove as a last
strike on industry’s back. Government should provide subsidy to the textile industry for the
survival of this industry. Continuity of 1pc controversial withholding tax on import of essential
raw material (cotton & polyester staple fibre) for industry should be withdrawn immediately.

37
This withdrawal would enable the industry to procure some 3m cotton bales annually from
outside world in order to meet the shortage and to compete with regional competitors in
international market to earn foreign exchange for the country.
On imposition of 16% FED on banking and insurance services such advance taxes would play
havoc with the growth of the industry in already existing adverse circumstances and needed to
be withdrawn immediately. The government should not withdraw sales tax and withholding
tax exemption on machinery and parts, as it would add cost besides liquidity problem for the
industry.

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