Pakistan: Decline in textile export hurts economy

Business Sunday 30/April/2023 12:28 PM
Pakistan: Decline in textile export hurts economy

Islamabad : The acceleration in textile export shrinking will exert pressure on Pakistan's depleting foreign reserves, hurting the livelihoods and economy of the country, reported Asian Lite International.

Textile exports slumped by 30 per cent in February and 21 per cent in March 2023, year-on-year. Textile exports have recorded a decline for seven months in a row. APTMA has painted a bleak picture for the industry in the wake of a shortage of cotton and restrictions on the procurement of raw materials, reported Asian Lite International.

The upheaval in the textile sector has left seven million jobless. Poor and vulnerable communities, especially, women have lost their livelihoods.

The majority of workers in the textile industry are informal or hired through third-party agencies. This makes it difficult for these workers to raise their concerns or approach the court of law in case of workplace harassment or loss of jobs.

Pakistan's ongoing power crisis just added to the problem. Frequent and longer outages and higher energy costs have driven many out of business. This has rendered losses of USD 70 billion to the textile industry alone, reported Asian Lite International.

The textile sector is one of the strongest pillars of Pakistan's economy, however, it's weakening due to a fall in cotton production, closure of manufacturing units, lower sales due to higher inflation, drop in exports, and unsuitable government policies, among others.

The textile industry has been in distress for a few years. However, the 34 per cent reduction in the cotton output due to the unprecedented floods created huge unavailability of raw materials and added to the problem, reported Asian Lite International.

Since the textile exports amount to 60 per cent of Pakistan's total export, observers said the crippled textile sector would hurt its economy in the long term.

Incidentally, the demand in the domestic market too fell as people were seen buying new garments and clothes during the Eid festival with difficulty, reported Asian Lite International.

All Pakistan Textile Mills Association (APTMA) Patron-in-Chief Gohar Ejaz held the Islamabad government responsible for the poor condition of the textile industry.

In a letter to Prime Minister Shehbaz Sharif, Ejaz said: "The progressive decline in exports is a consequence of the moratorium on the import of raw materials and essential spare parts, lack of adequate supply of energy at competitive prices and failure of the sales tax refund system, all have contributed significantly to the closure of over 50 per cent of the industry."

He even asked the US Ambassador to Pakistan to facilitate USD 2 billion loans to protect the textile industry. At present, the production capacity of textile units has gone down by 50 per cent. Pakistan needs to import 10 million cotton bales to keep its textile industry and exports rolling, reported Asian Lite International.