Increase in the cotton production and expansion of textile industry has been imp ressive in Pakistan since 1947

. Cotton – bales increase from 1.1 million bales in 1947 to ten million bales by 2000. Number of mills increased from 3 to 600 and s pindles from about 177,000 to 805 million similarly looms and finishing units in creased but not in the same proportion. It employs 50% of industrial labor force and earns 65% foreign exchange of total exports. Pakistan’s textile industry experts feel that Pakistan has fairly large size textile industry and 60-70% of machines need replacement for the economic a nd quality production of products for a highly competitive market. But unfortuna tely it does not have any facility for manufacturing of textile machinery of bal ancing modernization and replacement (BMR) in the textile mills which need to th ink about joint ventures for the production of complete spinning units with chin a, Italy and production of shuttle less looms (Projectile) with Korea, Taiwan an d Italy. Cotton textile industry has been premier industry in Pakistan and a major source of export earning and employment. It also helps in value addition to the manufa cturing sector of the economy. During the six years between 1993 and 1998, produ ction of yarn (in quantity terms) registered a steady annual growth rate of 302% in Bangladesh and 405% in India. On the contrary, Pakistan registered a growth rate of 101% per annum in yarn production although it ranked third after China a nd India in the global yarn production during the same six years. In exports, wh ile Taiwan, India and the republic of Korea registered an annual increase of 18. 1%, 27.7% and 5.4% respectively during 1993-1998, Pakistan registered a negative growth of 4.8% one important development was that till 1997, Pakistan was the w orld’s largest exporter yarn followed by India. However, in 1998, India gained the NO 1 position, leaving Pakistan at NO 2 In th e case of cotton cloth production, a number of Asian countries have been emergin g in the international market to compete with Pakistan. These countries are Bang ladesh, India, Taiwan, Indonesia, Thailand, Turkey, Sri Lanka and Iran. The late st available date on overall export performance of Pakistan comported with some regional countries is given in table 1: The above-mentioned presentation in the context of international scenario highlights the adverse position of Pakistan’s te xtile industry when is likely to continue further following the full implementat ion of WTO agreement from 2005 onwards when an era of free trade will start glob ally. Notwithstanding the above fact, current stagnation in the local textile industry can be overcome through efforts, consistent with charges occurring in the inter national market. It must be appreciated that all successive governments since th e birth of cotton textile industry in Pakistan have been encouraging the textile exporters to penetrate into new market and also to broaden the base of exportab le commodities by including value added textile goods so that reliance on export s of cotton, cotton yarn and coarse fabrics gradually become minimal. Reflecting on the state of affairs, Abid Chinoy, Pakistan cloth merchants Associ ation (PCMA) Chairman, Appreciated government’s efforts to encourage new exports a nd finding new markets, which need aggressive export marketing. The steps taken on the monetary front, such as the frequent devaluation of Pak r upee 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 loca l textile industry, and also due to inelastic demand for the Pakistan’s exports. I t has been rightly mentioned in the latest stage bank of Pakistan’s annual report (FY01) that, “Over the years Pakistan’s exports receipts have been vulnerable on acc ount of the narrow base of exportable items, concentrated markets and low value addition ‘this indicated that the growth in the country’s overall exports, including textile products which contributed more then 60% of total export receipts each

year, could to be related some cosmetic and ad hoc measure like devaluation of P ak rupee and concession export credits. The first textile commission, which was constituted by the first material law go vernment in 1960 had, inter-alia, recommended that an economic size textile unit should preferably have 25,000 spindles and 500 looms. No new mill with only 12, 500 spindles and without looms should be sanctioned. However, no need was paid t o the advice by the sanctioning authorities with the result that an excess capac ity had tented to build up in the spinning sector. During the period 1973 to December 1992, some 71 spinning units with 1,136, 835 spindles, 6,600 rotors and 7,329 looms were closed down. In 1992, a foreign cons ultant form was hired by the government to look into the stagnating conditions i n 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 spinning s ector, traditionally the core of the industry, is already in the crisis with man y spindles lying idle and mills being forced to close. Worse still, this sector will be hit by the projected decline of its major markets in Japan and Hong Kong in the coming years.” Another important strategic recommendation given by the foreign consultant very much relevant to the current Conditions: “It is vital that companies play very pos itive role in the markets, which each one having its own marketing activity, who se job is to understand the need of the customers and the ever changing competit ive dynamics of the markets. In order to improve exports, Pakistan’s Readymade Gar ments Manufacturers and Exporters Association (PRGMEA) has urged the commerce mi nister Abdul Razzak Dawood to set up an Apparel Board for the promotion of expor t of woven and kit garments which fetch US$ 2.5 billion foreign exchange for the country. The industry experts are of the opinion that in the order to have a st rong industrial base, Pakistan economy need investment upswing. Pakistan’s economic growth performance during recent years has been dismal: as aga inst the average growth rate of 6.1% in the 1980s, the half and 4.0% in the 2nd half of the 1990s. The major micro-economic instability factors like high inflat ion rate, budgetary deficit, continuous depreciation of rupee, economic sanction s, etc. could not help the investment process. Such an environment cannot be con ducive to investment and growth. Exporters of textile products have found the ta rget of US$ 10.4 billion set by the government for the year 2002-2003, as achiev able and termed it a realistic approach. The textile sector which constituted 69 % of total export during 2001-2002, believes that enhanced quota by the European Union and Turkey would make this possible to fetch another US$1 billion this ye ar. The rise in export of value-added products from Pakistan was another point of en couragement for the textile sector. “The export of value-added products rose to 57 .4% from 53.9% last year-a clear sign that we are moving in the right direction, “said the Chairman of all Pakistan textile mills association. The trade policy is considered an acceptable paper, but in the industry does not fine anything that could lead to a high level exports achievement and remove tr ade imbalance. Pakistan’s textile sector earned US$5.77 billion during the outgoing year, compare d with US$5.577 BILLION OF 2000-2001 indicating a growth of 0.69%. “Textile vision 2005” has identified the present status and opportunities to make in roads in con ventional and hew markets and has developed sectoral recommendations, hence the sectoral committees set up by the federal textile Board (FTB) would play an impo rtant role be ensuring the availability of quality raw materials on competitive prices and improvement in designing, and would adopt quality standards and incre

ase productivity levels. It would attract foreign brands and promote Pakistani b rands with world-class standers. With such a positive trend, Pakistan’s textile sector is getting rid of old impedi ments and gearing itself up for the new opportunities in the new trade regime.