You are on page 1of 2

Slowly, consumers in India are taking lead in prompting manufacturers to adopt clean technologies to produce eco-friendly products.

The textile industry is shared between natural fibres such as wool, silk, linen, cotton and hemp, and man-made ones, the most common of which are synthetic fibres (polyamide, acrylic) made from
petrochemicals. Most of the clothes in our wardrobes contain polyester, elastane or Lycra. These cheap and easy-care fibres are becoming the textile industrys miracle solution. However, their
manufacture creates pollution and they are hard to recycle (with nylon taking 30 to 40 years to decompose).The textile and clothing industry is a diverse one, as much in the raw materials it uses as
the techniques it employs. At each of the six stages typically required to make a garment, the negative impacts on the environment are as numerous as they are varied. Spinning, weaving and
industrial manufacture undermine air quality. Dyeing and printing consume vast amouts of water and chemicals, and release numerous volatile agents into the atmosphere that are particularly
harmful to our health.

Several times a year in the worlds fashion capitals, willowy models in dazzling outfits sashay down the
catwalk to present the coming seasons trends. Each year a handful of designers set the tone, says
whats in and whats not. Chain-stores and mass retailers then adapt their ideas for the man and woman
in the street. Fashion feeds a growing industry and ranks textile and clothing as the worlds secondbiggest economic activity for intensity of trade. However, stiff competition forces down costs

It was revealed that Global financial crisis has negative impact on the export of textile industry in Pakistan. The export of textile related products has decreased by
20 percent due to decrease in textile demand. It was further revealed that textile industry facing problems such as electricity and high taxes.

Asia accounts for more than half of world exports of garments and nearly half of world
exports of textiles. Note the heavy dependence of certain Asian countries on textiles or garments
for their export earnings: Bangladesh over 80% dependent on garments, Cambodia over 70%
on garments, and PAKISTAN 63% FOR T&G COMBINED.
The world recession has hit the Asian T&G sector at a time when the sector globally is
already in the throes of potentially massive readjustment (UNCTAD 2005). The T&G sector,
especially garments, is one of the most globalised of any in the world economy (UNCTAD
2002: 120-124).

Unsurprisingly, this means that garment manufacturing is geographically removed from

major garment markets. As Figure 1 shows, more than 60% of production is carried out in East Asia,
while about 60% of consumption occurs in the EU, the US, and Japan (with China rapidly becoming a
large consumer as well). (Gugnami and Mishra 2012)
The low barriers to entry that make textile and apparel production so pervasive also make scoping and
quantifying its full social impact nearly impossible. However, even conservative estimate suggest that
this industry directly employs more than 40 million people worldwide. In some developing countries, the
textiles and apparel industries are a particularly important source of manufacturing employment, which
is often associated with lifting individuals out of poverty. Key examples of this include Cambodia
(80.1%), Mauritius (72.8%), Sri Lanka (49.2%), Bangladesh (35%), Pakistan (42.9%), and Madagascar
(45%). (McNamara 2008)

The GSP Plus status will allow almost 20 per cent of Pakistani exports to enter the EU market at zero tariff and 70 per cent at
preferential rates. This status would enable Pakistan to export more than US$1 billion worth of products to the international markets.
Only the textile industry would earn profits of more than Rs1 trillion per year. Meanwhile expressing his pleasure over the
development, Finance

Minister Ishaq Dar said the EU status will help Pakistani exports to rise by up to $2 billion.

The status allows Pakistan to have exported 20 percent of its goods with zero tariff, while 70 percent would
have a preferential rate policy. Also, these concessions are not just confined to the textile industry. More
than 600 kinds of goods could be exported duty free after receiving this status. It has the potential to turn
the countrys economic graph on an ascending curve. When Bangladesh received the same status, itsexports
increased from $5 billion to $25 billion. In the same way, if the opportunity was properly utilized, Pakistani
exports could as well see the same or even better results.

Moreover, the duty free privileges are going to attract many local and foreign investors towards the industrial
sector of Pakistan. The country is sure to become acenter of investment for foreign investors. They look for
such opportunities where they could export their goods duty free. Many Pakistani investors had gone to
Bangladesh and had setup industries there to benefit from that countrys GSP plus status. Now that Pakistani
exporters have at their disposal the same privileges, those deserted local investors are going to be tempted to
bring the investment back into Pakistan. However, even if they will not bring back their investment, the GSP
Plus status is surely going to stop any further flight of capital.

The biggest reason of the closure of many of these industries is power shortage. It is the mother of all
problems that the industrial sector face in Pakistan. Also, to add insult to injury, the government has
increased electricity tariff rates to an unbearable level. Natural gas which is a cheaper alternative to
electricity, is also non existent. The industry could somehow bear the otherwise unbearable high power tariff
rates, but it cant survive the long and persistent power blackouts.
Additionally, European economies are in recession at the moment. In recession, the purchasing power of the
people gets significantly reduced. This is going to be a big problem for Pakistan in getting maximum benefits
from its GSP Plus status.
In addition to recession in European economies, Pakistan has to compete against tough competitors like
Bangladesh and Sri Lanka. Though the GSP Plus status has provides Pakistan a level playing field, but still,
both of these countries have had this same status from long time. They have established a firm base there.
Buyers do not easily change their preference. So Pakistani products have to compete against all these odds.
Another problem is that Pakistans leading trading partner is United States, especially for textile exports.
Pakistan exports about 55 percent of its merchandise to US, while some 25 to 30 percent to European Union.
Also, buying capabilities of both of them differ significantly. US tends to place big orders, while EU places
small but usually continuous orders. Pakistani exporters have to readjust to that.
In conclusion, the 10 year GSP plus status for Pakistan by the European Union is a blessing for the country. It
will revive industrial sector of Pakistan and create thousands of new jobs for the people. However, there are
many challenges being faced by Pakistan to fully utilize the benefits from this precious status. But with
dedication and unflinching resolve on part of the government, these problems could be easily solved.