Cheaper yarn from Vietnam has emerged as a threat to Pakistan’s spinning industry. Vietnam's yarn industry had grown threefold in the last four years while its yarn exports are growing by 40 per cent a year. Industrialists in many countries are relocating their units to Vietnam while China continues to invest heavily in the textile sector of that country, which is expanding their capacity at a fast pace.
Pakistan has already lost a big share in the international clothing market to rivals such as Bangladesh. The country’s textile exports have continued to fall since 2009-10 with added momentum in the last three years.
The export sector in Pakistan has demanded refunds should be paid to lure international buyers who have decided to do business with Bangladesh, China and other rivals. Exporters say it’s just the GSP plus status that has helped Pakistan to remain in the international market. Otherwise the country’s products would have been nowhere. The Generalised Scheme of Preferences-Plus provides zero-duty market access to Pakistan’s products, including textile and clothing, into the European Union.
Pakistan’s textile exports declined by 0.5 per cent in November 2016. Exports of basic textiles fell by 1.9 per cent year on year during the first five months of the current fiscal.