Pakistan’s textile exports have slumped and one of the major reasons for poor performance of the sector is the failure to cope up with technological advancement. Conversely, Bangladesh and Taiwan have adopted state of the art technology and captured a significant chunk of the international market.
In order to boost falling exports of textiles and garments, the sector has been injected with funds. In addition, export financing rate offered to the textile sector stands at 3.5 per cent, the lowest in the last 10 years. The sector has been the lifeline for Pakistan’s exports. The country is the fourth largest cotton producer in the world. Moreover, Pakistan also has the largest spinning capacity in Asia after China and India.
Pakistan wants to do exports of $35 billion dollars by 2018. The top five textile sectors have been given a zero-rated sales tax regime. Sales tax and customs duty on imports of textile machinery and cotton have been abolished. A number of projects of power generation through hydel, coal, solar, wind, and other resources have been initiated.
New export destinations including Mexico, Central Asia, Africa and Doha are being looked at. About 60 per cent of Pakistan’s exports go to ten countries, namely, USA, China, UAE, Afghanistan, UK, Germany, France, Bangladesh, Italy and Spain. Right now Pakistan’s exports to South America, Africa, Central Asian Republics and Russia are less than ten per cent of the total exports of Pakistan.