December 16, 2020 (MLN): The pandemic hit the textile sector in the Asia-Pacific region hard especially in India, Bangladesh and many others, with plummeting retail sales in major export destinations affecting workers and enterprises throughout supply chains.

A recent report on BBC analyzed Pakistan’s export competitiveness in the textile sector amid pandemic. From traditional handicrafts to the production of fabrics in mills, Pakistan’s textile industry is marked by innovation, growing supply chains and distribution channels, affecting the lives of 40% of labour force in the industrial sector.

While talking to the textile exporter from Faisalabad, the report underlined that due to the lockdown in India amid the epidemic, the export supply chain was disrupted, so his overseas buyers turned to Pakistan and his company received more orders in the last few months where the competitive price of his products played a role. According to him, most of the orders were for home textile, denim and apparel products, including buyers who had previously been buying these products from India.

During the first four months of FY21, Pakistan's textile exports exceeded 4.5 billion US dollars on an account of higher export orders while the exports earnings from textile products increased by 4% during the said period when compared to the first four months of the last financial year.

According to government and textile officials, the sector is currently working at its full potential, which is a positive development for the country's export sector as well as job creation.

The increase in exports of Pakistan's textile products is encouraging for the country's external account, which will help the country achieve its total export target of 26 billion US dollars in the current financial year.

The report highlighted that exports of Pakistan's textile sector increased by 7% in October’20, while neighboring country India saw a decline of more than 5% in textile export earnings this month.

Moreover, the surge in overall exports from the growth in Pakistan's textile exports also helped reduce the country's trade deficit.

Improved production capacity and increased exports of Pakistani textile products have led to an increase in demand for the textile commodities owing to the easing of restrictions imposed to control the spread of the epidemic along with government relief measures for the industrial sector, the report said.

Share of the Textile sector in Pakistan’s Economy

The textile sector accounts for more than 8% of the country's gross national product and its products contribute 60% to the country's total export sector. It is the largest manufacturing sector in Pakistan, employing about 40% of the labor force in the industrial sector.

Pakistan is the eighth largest textile exporter in Asia, according to data on the Board of Investment's website. At present, there are more than 400 textile factories operating in Pakistan, while the most important raw material for the sector, cotton, is readily available in the country.

Reasons for the Growth of the Textile Sector

Faisalabad and Karachi are the two major centers of the textile sector in Pakistan and according to the sources, both the centers are functioning at full potential.

Asif Inam, the owner of a textile mill, said the sector is currently working at its full production capacity, largely due to orders it received. He said that the good performance of this sector can be gauged from the fact that at the end of the previous government, the share of Pakistan's textile products in its worldwide exports had gone up to 1.8 percent but now it is 2.2 percent. It has risen to 4%, which is great evidence of this sector’s performance.

Asif said that the severe lockdown in India also benefited the Pakistani sector and the fear of non-fulfillment of its export orders from there attracted international buyers to Pakistan.

Zubair Motiwala, former president of the Karachi Chamber of Commerce and Industries and an owner of the textile mill, described the performance of Pakistan's textile sector as encouraging, saying that the main reason was the inventory gap in the European and American markets which was filled by Pakistan’s textile sector, the report said.

He explained that the lockdown caused by the coronavirus in Europe and the United States had severely affected his import of products from abroad. Inventories during the lockdown ran out but after the relaxation in the lockdown, buyers turned to Pakistan for immediate goods.

Motiwala said that due to the lockdown in India, the textile sector was unable to meet the large export orders from the United States and Europe, which benefited Pakistan.

Will the Textile Sector continue to deliver good performance in the future?

Talking about the future performance of this sector, Zubair Motiwala said that it depends on the extent to which our sector remains competitive and its products have a competitive edge in the world markets.

He said there was a slight easing of the coronavirus-related lockdown in the United States and Europe, which boosted demand, but the corona vaccine would arrive in the near future and the market situation would return to normal. The performance of this sector of Pakistan will determine the extent to which it will be able to compete with the products of other countries, as per the report.

Alia Hamza Malik, Parliamentary Secretary for Commerce, Industry and Production, expressed hope that the textile sector would continue to perform well, citing government policies that are providing full support to the sector.

She said that further improvement in the performance of this sector in the coming days can be gauged from the fact that not only the textile sector is running at its full potential but also the power looms are working at their full potential.

Alia Malik said that the present government has formulated policies for the sector through which it can be fully supported as the sector has a key role to play in the country's economy and job creation.

Shedding light on export orders, she said that according to the industrialists associated with the textile sector, not only do they have export orders for the month of December, but some have also shared the information of receipt of export orders till June.

Only time will tell how Pakistan’s textile sector looks like after Pandemic.

Can cotton shortages cause problems for the Textile Sector?

Zubair Motiwala said to BBC that the industry could face problems due to poor cotton harvest this year as the biggest raw material in the sector is cotton.

He said that six and a half to seven million bales of cotton would be available as against twelve and a half million bales last year.

Zubair said that this problem can be overcome, and the easy solution is that Pakistan can import cotton from India like medicine and that will be very cheap for Pakistan. He said that while medicines to save lives could be imported from India, why cotton could not be imported from there to help the country's economy and especially the textile sector this year.

How is the Textile Sector increasing employment opportunities?

Asif Inam said that if we talk about the revival of the textile sector and the power looms related to it, then a lot of employment opportunities have been created.

He said that if we talk only about power looms, then 10 to 20 lakh power looms which were closed have been reactivated and according to an estimate, only one to two people work on one loom. He mentioned that only power looms by themselves are providing employment to millions of people.

In 2016 when the textile industry in the country closed down and textile mills were shifting from here to Bangladesh, according to the international media, it made millions of people unemployed. Now the country's textile industry is once again fully restored and the power looms that were closed are operational, it is easier to estimate how many more jobs have been created, said Parliamentary Secretary for Commerce, Industry and Production.

Alia Malik claimed if we talk only about Faisalabad, there is a shortage of skilled labor in the textile sector in this city and according to the industrialists, they are facing difficulties in finding skilled labour as their demand is very high.

Does the Textile Industry need innovation?

Mehtab Haider, a senior journalist shared his suggestions for significant development in the textile sector, saying that first of all the sector should be freed from Seth culture and transformed into the corporate culture. At the same time, there is a dire need to harness technological innovation and diversify products of this sector so that Pakistan’s export share in the world market can be increased, the report added.

In this regard, Alia Hamza Malik said the government is working on this as well. Pakistan, which had traditionally relied on yarn exports, could now export bed linen and other value-added products.

Today, the textile sector in Pakistan is moving towards sustainable manufacturing as radical innovations, market transformation, supply chain and development channels emerge. The government is also working to increase the total exports of products other than the traditional sector such as cement and pharmaceutical exports along with textiles, she added.

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