Pakistani textile exporters are steadily claiming the industry has lost its viability against competitors due to the rising cost of doing business, and more groups are seeking government intervention.
The Pakistan Textile Exporters Association (PTEA) chairman, Sohail Pasha, blames the inefficient and unfriendly socio-economic environment for the rising cost of doing business in Pakistan. According to the Tribune, Pasha said the increasing cost of inputs has made the country’s textile exports uncompetitive in the international market.
“Taking advantage, rival countries are gaining markets that have traditionally been held by Pakistan’s textile exporters,” he said, adding, “The past few years have proven to be disastrous, particularly in Punjab. While risings costs have blunted Pakistan’s competitive edge, energy constraints have crippled whatever remained.”
With the help of their government, regional rivals have grown their exports and increased their market share in the global textile trade, the Tribune reported.
From 2008 to 2013, Pasha noted, Bangladesh’s textile exports have grown by a significant 160 percent. He also took notice, by way of comparison, that growth in China’s exports was 97 percent and India’s exports increased 94 percent, while Pakistan’s exports grew marginally by just 22 percent.
According to the Tribune, because of this growth, Bangladesh has also increased its share in global textile trade from 1.09% in 2006 to 3.30% in 2013. China’s share has grown from 27 to 37 percent and India’s has increased from 3.4% to 4.70%, but Pakistan’s has dropped from 2.20% to 1.80%.
With the energy crisis declared as the number one factor limiting production growth, Pasha said the textile industry faced 27 percent gas load shedding in 2010, 41 percent in 2011, 46 percent in 2012, 66 percent in 2013 and 70 percent in 2014. It also experienced 37 days, on average, of power load-shedding in 2011, 66 days in 2012, 96 days in 2013 and 122 in 2014.
Bangladesh, China and India have also added spindles. Between 2008 and 2013, Bangladesh has added 1.98 million spindles, China added 35.29 million and India added 14.20 million. Pakistan has only added 1.02 million, Pasha noted.
Now Pasha said, the government should step in and level the playing field by providing incentives that would boost exports. Exporters are also requesting the government create clear-cut policies to help save the textile industry.
But cutting the energy costs and stabilizing energy supply is only the start of saving Pakistan’s textile sector, the entire tax regime will need to be reviewed to make the industry sustainable.