Pakistan’s new textile policy doesn’t seem to have helped the industry. One is the looming competition from Chinese textiles. China is heavily investing in textile manufacturing facilities in provinces bordering the South Asian nation. Pakistani markets are already awash with low cost Chinese products. Pakistan fears a similar influx of goods under China’s transit trade.
Then there is the issue of high energy prices. Energy is an important element of the cost of production, particularly for spinning, weaving and processing. The industry feels its availability at regionally competitive prices is important. Textile exports contribute around 60 per cent to Pakistan’s total exports, which are already on the declining trend owing to a host of factors, including high production costs and lack of incentives.
Pakistan aims to export $35 billion worth of textile products by 2018. And for this the government has given exporters Rs 180 billion incentive package. 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.
A network of roads, highways and motorways is being laid to integrate different regions of the country.