There is a difference of opinion between the State Bank of Pakistan and the textile industry on what ails textile exports. The bank feels structural issues are the primary cause behind weak textile exports rather than energy constraints. It says there has been a decline in export of cotton yarn and fabrics and this has more than offset the increase in export of knitwear, woven garments and towels.

The central bank says textile exports posted a 0.4 per cent decline in the first half of FY 2015 as compared to the same period last year and this decline comes primarily from low value-added items. However, Pakistan’s textile manufacturers say energy constraints and security risks are the prime factors that have badly affected the textile sector’s performance. They say there is no supportive textile policy and due to unfriendly tax structures there is no incentive for industrialists to upgrade their textile units as per global standards.

Textile units want the duty structure to be relaxed so that manufacturers can import latest machinery and make full use of GSP Plus status benefits and export value-added items like knitwear and readymade garments to the European Union.