Daily Times

If data are to believed, the textiles and clothing industry in Pakistan has shown an upward trend with a 10.44 percent increase in exports during the first four months (July-October) of FY25. Exports this year fetched $6.15 billion compared to $5.56 billion last year.

The textile export growth is unbelievable despite challenges such as falling local cotton production and increased reliance on imported cotton. A couple of months ago, textile millers voiced their anger through paid ads in the media about the mass-scale closure of textile mills due to ‘unbearable’ power costs. Now, the recovery as well as exceptional export data shows that the sector might have got ‘subsidized’ relief. While the sector has shown signs of recovery, its long-term competitiveness remains under threat due to structural issues and policy gaps.

The fiscal year has experienced fluctuating progress. Like, the year began with a 3.09 percent contraction in textile exports in July. This sparked concerns about the industry’s trajectory. However, the sector rebounded strongly and recorded over 13 percent growth in August, 17.92 percent in September and 13.11 percent in October and counting. Key segments, including readymade garments and knitwear, drove this growth, with readymade garments rising 25.40 percent in value and 19.94 percent in quantity, and knitwear growing 18.69 percent in value and 10.03 percent in quantity. Bed items also showed robust performance, up 13.17 percent in value and 13.60 percent in quantity. Despite this progress, the sector’s reliance on imported cotton diminishes the trickle-down effects of the export benefits. Declining local cotton yields have left the industry vulnerable to volatile international markets. The government’s failure to enhance domestic cotton production has forced manufacturers to depend on costly imports. The challenge is compounded by harsh taxation measures introduced in the 2024-25 budget, including higher personal income tax rates for exporters, which are squeezing margins.

Textile is a competitive sector, and the closest regional rival is Bangladesh, which has outpaced Pakistan in global markets. Disruptions in Bangladeshi supply chains due to a recent change of power have temporarily benefited Pakistani exports. Experts caution that without meaningful policy reforms and investment in local raw material production, the industry risks losing its edge. For a while, let us celebrate the fetch of $6.15 billion through textiles and clothing exports. But comparison pales when we see stagnant textile plants with their $25 billion installed capacity. *