Pakistan is expecting textile exports to grow. The value added sector is operating at almost full capacity and many big players are in the process of expansion. There are multiple reasons for exuberance – currency devaluation, subsidy to textiles, and availability of energy at competitive rates. One big booster is improvement in perception. The overall image of the country is improving and the opening up of visa regimes is helping as well. Buyers are visiting and new orders are being placed.
With the tariff war between the US and China, and protests against low wages in Bangladesh, buyers are thinking of diversifying from these two markets. Pakistan has the opportunity to grab a bigger share. However, building the requisite backward linkages is required. Without enhanced cotton production, it is hard for the textile industry to reach its true potential. One of the reasons for the erosion in competitiveness is the fall in Pakistan’s cotton production. The seed industry needs to be regulated and serious consolidation is required to improve the yield. The other factor is to do away with price support to other crops such as sugarcane which has resulted in substitution of sugarcane for cotton. Another need is to find new markets.