Table of Contents

Pakistan textile industry 3

Introduction: 3

a. Absence of Exploration and Improvement (Research and development) in Cotton Segment 4

b. Absence of Modernize Hardware 4

c. Fund Bill to Weight Industry Further 5

d. Expanding Cost of Creation 5

e. Inner issues Represent a Bigger Danger for Pakistan's Material Industry 5

f. Vitality Emergency 6

• Power Emergency 6

• Gas Deficiency 7

g. Tight Money related Approach 7

h. Evacuation of endowment on Material division 8

j. US and EU cuts imports of material from Pakistan 8

k. Crude material Costs 8

l. Fare Execution of the Material Area 9

n. Impact of Swelling 10

Conclusion: 12

References 13

Pakistan textile industry

Introduction:

The Pakistan material industry all out fare is around 9.6 billion US dollars. The material business
contributes around 46 percent to the absolute yield or 8.5 percent of the nation Gross domestic
product. In Asia,

Pakistan is the eighth biggest exporter of material items giving work to 38 percent of the work
power in the nation. Notwithstanding, the material business as of now faces monstrous
difficulties. The All Pakistan Material Factories Affiliation (APTMA) needs to improve the nature
of its items. Be that as it may, APTMA contends different factors, for example, high loan fees
and cost of information sources, non favorable government approaches, furthermore,
History of Pakistan Material Industry
Increment in the cotton creation and extension of material industry has been noteworthy in
Pakistan
since 1947. Cotton – parcels increment from 1.1 million bundles in 1947 to 10 million bunches
by 2000. Number of plants expanded from 3 to 600 and shafts from around 177,000 to 805
million also
weaving machines completing units expanded yet not in a similar extent. Pakistan's material
industry specialists feel that Pakistan has genuinely huge size material industry and 60-70% of
machines need swap for the financial and quality generation of items for a very focused market.
Yet, lamentably it does not have any office for a assembling of material hardware of adjusting
modernization and substitution (BMR) in the material factories.

We have to consider joint endeavors for the creation of

complete turning units with china, Italy and generation of transport fewer weaving machines
Korea, Taiwan and Italy. Thinking about the situation, Abid Chinoy, Pakistan fabric vendors
Affiliation (PCMA)
Director, Valued government's endeavors to support new fares and finding new markets,
which need forceful fare showcasing.

The means taken on the fiscal front, for example, the successive
cheapening of Pakistani rupee as far as dollar couldn't improve the cost intensity of exportable
items because of increment in costs of the neighborhood and imported contributions of the
nearby material industry. Amid the period 1973 to December 1992, around 71 turning units
with 1,136, 835 shafts, 6,600 rotors and 7,329 weavers shut down. In 1992, a remote adviser
structure was enlisted by the legislature to investigate the stagnate conditions in the
neighborhood material industry.

One of the perceptions of the remote expert was "Pakistan has neglected to gain genuine
ground in the universal market and is being finished taken by numerous individuals of the
neighboring contender nations.

The ascent in fare of significant worth included items from Pakistan was another purpose of
consolation for the material division. "The fare of significant worth added items rose to 57.4%
from 53.9% in 2002 which is clear sign that we are moving the correct way, "said the Director of
all Pakistan material plants affiliation. The exchange arrangement is viewed as a worthy paper,
however in the business does not fine anything that could prompt an abnormal state sends out
accomplishment and evacuate exchange irregularity.

Pakistan's material segment earned US$5.77 billion amid the multi year, contrasted and
US$5.577
BILLION OF 2000-2001 demonstrating a development of 0.69%. The complete fares of material
part in 2004 were US 5.7 billion which demonstrates 2.5% development it increments to 4%
development in 2005 when contrasted with 2004.The material area indicates 8% negative
development in 2006. The negative development proceed in 2007 also with the estimation of
5% . The material area indicates 15% development in 2008. Presently we will talk about the
principle reasons of emergency in material industry well ordered in detail.

a. Absence of Exploration and Improvement (Research and development) in Cotton Segment

The absence of research and improvement (Research and development) in the cotton segment
of Pakistan has brought about low quality of cotton in contrast with rest of Asia. On account of
the resulting low productivity in cotton crops, ranchers are moving to other money crops, for
example, sugar stick. It is the absence of legitimate Research and development that has
prompted
such a state. They further blame cartels, particularly the pesticide area, for thwarting legitimate
Research and development.
The pesticide segment stands to profit by hindering nearby Research and development as
higher yield cotton is more pesticide Safe.

b. Absence of Modernize Hardware

Also, faultfinders contend that the material business has out of date hardware and apparatus.
The failure to opportune modernize the gear and hardware has prompted the decrease of
Pakistani material intensity. Because of out of date innovation the expense of creation is higher
in pakistan as thought about to different nations like India, Bangladesh and china.

c. Fund Bill to Weight Industry Further

All Pakistan Material Factories Affiliation (APTMA) has informed that administration's activities
are not coordinating with its words for the material business. Alluding to the Head
administrator Yusuf Raza Gilani discourse at the starting service of the Foundation
Advancement of the Pakistan Material City at Port Qasim Mechanical Zone, where Executive
talked high of the material business commitment towards the nation's economy, Director
APTMA Tariq Mehmood said the government spending plan 2009-10 is an aggregate
nullification of the affirmation of the job of material industry with respect to the Head
administrator.

As per him, reintroduction of least assessment on household deals would welcome unavoidable
liquidity issue, which is now come to the disturbing dimension. He said the material business
was confronting negative age of assets because of excessively expensive increase rate from one
viewpoint and intense deficiency of vitality supply and unbelievable power duty for industry.

d. Expanding Cost of Creation

The expense of creation of material ascents because of numerous reasons like expanding loan
fee, twofold digit expansion and diminishing estimation of Pakistani rupee. The over all reason
expanded the expense of generation of material industry which make issue for a material
industry to contend in universal market.
e. Inner issues Represent a Bigger Danger for Pakistan's Material Industry

Pakistan's material industry is experiencing one of the hardest period in decades. The
worldwide retreat which has hit the worldwide material extremely hard isn't the main source
for concern.

The mind-boggling expense of creation coming about because of a moment ascend in the
vitality costs has been the essential driver of worry for the business. Devaluation of Pakistani
rupee amid a year ago raised the expense of imported information sources. In expansion,
twofold digit swelling and staggering expense of financing has genuinely affected the
development in the material industry.

Pakistan's material fares have gone down amid most recent three years as exporters can't
viably showcase their items since purchasers are not visiting Pakistan because of unfriendly
tourism warning what's more, it is getting increasingly more hard for the exporters to travel
abroad.

Material exporters legitimately request decrease of Kibor rate to 8% to maintain a strategic

distance from an extreme decrease in trades.

A three-year far reaching material approach is required to be reported before spending plan
2009-10. The material strategy has been intended to upgrade the fares of material part to $ 25
billion in next three a long time. This was expressed by the Pastor for Material Industry Rana
Farooq Saeed Khan. Material Priest further educated that the turning and weaving segment
would get its due offer from the Fare Venture Bolster Store, worth Rs. 40 billion allotted in the
Government Spending plan 2009-10.

Rana Farooq called attention to that he has upheld the instance of prompt help to material
industry in the Parliament and furthermore in the Bureau gatherings since he is sure that lone
material industry was sufficiently proficient to bunch out Pakistan from the current monetary
emergency.

He further said that despite the fact that we are fourth biggest maker and third biggest
purchaser of cotton however lamentably now we are at number 12 in the worldwide exchange
of material items. Also, he focused on that legislature should take prompt measures to expel
log jam in the material division. He said that staggering expense of working together is on the
grounds that of serious increment in the rate of intrigue which has expanded the issues of the
business.

He said that record increment in markup rates is one of the real reason for defaults in adjusting
the advances profited by the business, subsequently, the volume of non-performing advances
has come to a disturbing circumstance.
He said that control shut downs may result in enormous joblessness bringing about law and
request circumstance.

f. Vitality Emergency

• Power Emergency

As a result of burden shedding the material generation limit of different sub-divisions has been
diminished by up to 30 percent. The joint gathering of APTMA and other related association
was held at APTMA House to detail a joint system to address the disturbing power emergency
being looked by the material industry.

The gathering collectively chose to establish a joint working gathering of power

the executives for the material business in the bigger interests of the esteem chain of the
material business. The joint working gathering will meet right away to structure a nitty gritty
arrangement to seek after the accompanying objectives; Prompt all out exclusion from Power
load shedding for the material business esteem chain; Legitimization and decrease of power
levy. - ensured vitality supplies upset their intensity .

The heap shedding of power cause a fast abatement underway which likewise decreased the
in power tax. Due to load shedding some factory proprietor utilizes elective wellspring of
vitality like generator which increment their cost of generation further. Because of such
emotional circumstance the ability of aggressiveness of this industry in global market affected
seriously. . delineates correlation between power creation and consumption.
• Gas Deficiency
Gas Lack Gas load-shedding proceeds in Punjab and NWFP in spite of a huge increment in
temperature. A representative for the All Pakistan Material Plants Affiliation (APTMA)
guaranteed that 60 to 70 percent of the business had been influenced and was unfit to
acknowledge trade orders rolling in from around the
globe.
He said the material business had just suffered more than 45 days of gas disengagement over a
period of four months, causing remarkable creation misfortunes and severely influencing
capacity of the business.
In Punjab, he stated, vitality supply interruption just was causing an expected loss of Rs1 billion
every day.
In the bigger enthusiasm of the economy and fares, he proposed, the legislature should
"guarantee utility organizations give smooth power and gas supply to the material industry.

g. Tight Money related Approach

The progression of tight financial approach cause an escalated increment in expense of

creation. Because of high loan fee financing cost builds which cause an extreme impact on
creation. The with holding duty of 1% likewise impact the generation seriously.
The surprising expense of working together is a direct result of serious increment in the rate of
intrigue which has expanded the issues of the business. The legislature should take quick
measures to expel lull in the material division.

h. Evacuation of endowment on Material division

The arrangements of Fund Bill 2009-10 are not material industry neighborly by any means.
Arrangements like reintroduction of 0.5% least expense on residential deals, 1% retaining duty
on import of material and articles and so on., are only keep going strict on industry's back.
Reintroduction of least expense on household deals would welcome unavoidable liquidity issue,
which is as of now come to the disturbing dimension.
The material industry was confronting negative age of assets because of excessively expensive
increase rate. I. Absence of new speculation Pakistan material industry is confronting issue of
Low profitability because of its out of date material apparatuses.
To beat this issue and to remain in rivalry, Pakistan Material Industry will require high
speculations.
There is a constant pattern of putting resources into turning since numerous years. Pakistan's
material industry gauges that around Rs1, 400 billion (US$32 billion) of venture was required till
2010 in request to accomplish the administration's fare target." Pakistan is confronting
remotely just as inside issues which confines the new venture .
The capricious interior state of Pakistan cause a fast decline in outside venture that influenced
all enterprises yet particularly material industry.

j. US and EU cuts imports of material from Pakistan

US drop all the more then half of material requests of Pakistan .US additionally force a high
obligations on the import of material of Pakistan which impact the fare in an awful way. US and
EU are the significant merchant of Pakistan material which make a tremendous contrast in fare
of Pakistan material subsequent to forcing a
confinement on import of Pakistani material merchandise.

k. Crude material Costs

Costs of cotton and other crude material utilized in material industry vary quickly in Pakistan.
The quick increment in the value crude material impact the expense of creation gravely.
The expansion in crude material costs vary quickly dur to twofold digit expansion and instable
inner state of Pakistan.

Due to increment in the expense of generation the interest for fare and home also diminished
which result in terms of down measuring of a firm. Thus the joblessness level will likewise
increment. Govt should take genuine advance to endure the material business. So as to
diminish the value crude material for material we
need to build our creation capacity.

All the while, the legislature should make game plan for presenting universal arrangement of
Cotton Institutionalization in Pakistan to improve quality and esteem
of Pakistan build up cotton by using the specialized administrations of Pakistan Cotton Standard
Organization.
l. Fare Execution of the Material Area

For the second year straight, the nation missed yearly material fare focus of 12 billion dollars by
20 percent because of surprising expense of generation, control lack and hardened challenge
with provincial players.

The national government visualizing 15 percent development had set material fare focus of 12
billion dollars for FY09 against 10.35 billion dollars for FY08. Be that as it may, in FY09, the
nation not just missed its material send out target yet in addition enlisted a decrease of around
6 percent when contrasted with FY08. "Truly,

the nation has missed the mark concerning material fare focus by more than 2 billion dollars
because of the worldwide emergency and a few obstructions looked by material industry on
the residential front," said Mirza Ikhtiar Baig, Leader's
Consultant on Material. Ikhtiar said that surprising expense of working together, control
deficiency, poor modern framework and moderate outside interest are some main
considerations adding to the decrease in material send out.

In any case, he is certain that amid the current financial year material division will indicate
better execution as the administration is attempting to expel the duty hindrances, other than
investigating new material trade markets. "I am sure that the legislatures and the Service of
Material's endeavors will be supportive in boosting the nation's material fare and empowering
it to rival other territorial
contenders like India and China," Baig said.

Moreover, the official insights of the State Bank of Pakistan (SBP) demonstrate that the nation's
material fares is likewise some 2.36 percent lower than the fare of monetary year 2006-07, in
which generally speaking material fares according to receipts remained at 10.011 billion dollars.

The national bank has additionally uncovered that out of 12 noteworthy material fare 9 enlisted
negative development and fare of just three things - crude cotton,
bed wear and towels has posted some expansion. With 18.34 percent decrease, ready made
articles of clothing sends out remained at 983 million dollars and knitwear trade at 2.054 billion
dollars after a decrease to 4
percent in FY09 . demonstrates examination of Pakistan Material Fares in (US$bn) for various
monetary years. m. The Impact of Worldwide Retreat on Material Industry In financial aspects,
the term 'retreat' signifies "The decrease of a nation's Total national output

(Gross domestic product) for at any rate two quarters; or in typical terms, it is a time of
diminished financial movement."

Pakistan is 26th biggest economy on the planet, and 47th biggest as far as the dollar. It is pitiful
to see our economy like this now. Pakistan is really an in all respects financially assorted nation
with bragging businesses of materials, horticulture, and so forth.

The primary purpose behind this droop has to a great extent been the political unsteadiness in
the course of recent years; no appropriate monetary strategies were actualized; at any rate
none that succeeded.
This caused a high rate of expansion, which, in 2008, had expanded to an astounding 25% when
contrasted with a 7.9% of 2006.

What happened a while later is the thing that we call the domino impact. The estimation of the
Rupee slammed from 60-1 USD to 80-1 USD in just a month, the costs of items took off through
the rooftop, the quantity of individuals living beneath destitution line expanded from 60 million
to 77 million, and subsequently, the
average workers layman turned out to be practically denied from essential necessities like
water, wheat, power,

flammable gas, and cooking oil; add to this, the over the top measures of burden shedding, and
what we get is a country in shambles.

The over all circumstance of the economy severely affected the material business moreover.
The interest for material item chopped down locally and globally also. The fare request
diminished due to unusual states of Pakistan and political shakiness. The chop down in the
creation of material bring on additional joblessness level which decline the expectation for
everyday comforts of people groups.
n. Impact of Swelling

Swelling rate is estimated as the adjustment in shopper value record (CPI).Inflation is

fundamentally a general ascend in the value level. It is decrease in the genuine estimation of
cash.

Expansion can have unfavorable impact on economy. Pakistan is one of prey of swelling.
Regardless it faces high twofold digit expansion. The expansion in
swelling cause the expansion in the expense of generation of material great which return in
cutting back.

The twofold digit swelling cause decrease in fares of textileo. Joblessness Brought about by
Material Joblessness happens when an individual is accessible to work and looking for work
however as of now without
work.
The joblessness rate in 2006 was 6.6 percent which diminishes 0.1 percent in 2007. The
joblessness rate spans to 7.5 percent in 2008 because of worldwide crisis.As the LSM decline
the creation that is the reason the joblessness level risis very rapidly.The ascend in joblessness
level is 11 percent in 2009.

The joblessness rate in material industry was high amid the current financial a long time as a
result of retreat and expanding cost of sources of info and fluctuating circumstances of nation.
Year shrewd correlation of swelling and joblessness with the time Recommendations .
The administration is thinking about remedial measures on the proposals of partners to address
the issues and issues looked by the material business of the nation for upgrading its generation
and
trades.

The legislature is probably going to declare material approach likewise called National Material
Procedure in the mid of current month to help advance the material part of the nation, sources
told Application. For the reason for this, the Material Service has counseled all material
segment affiliations and the assemblies of business and industry.
The service got suggestions for zero rating on import of material hardware, zero rating sends
out, duty decrease, unremitting vitality supply to material units.
Issues relating to the market access and quality items with auspicious conveyance and single
digit increase and extraordinary control duty for the material business has additionally been
prescribed.

It has been recommended that material approach may incorporate the issue like obligation free
market access to European Association and US as Pakistan is the biggest merchant of USA long
staple cotton to the
tune of $400 million to $500 million consistently. What's more, the financial watches trust that
the

material segment was going through a troublesome stage because of vitality lack in the nation
and required remedial measures for advancement.

Some other Explicit Proposals are given as under:

• Cure however Outside Direct Speculation (FDI)

• Picture Working of Pakistan to Pull in Outside Direct Venture (FDI)

• Spotlight on Esteem Expansion

• Innovation Up-degree and Limit Building

• HR Advancement

• Lessening the expense of working together in Pakistan

• Requirement for Improving Material Generation

• Improvement in efficiency

• Consciousness of Global Quality Norms

• Presenting idea of at work preparing

• Presenting effective administration procedures

• Appropriation evacuation ought to be taken a back

• Financing cost ought to be abject so as to endure this industry

• Power and gas levy

• Evacuation of Vitality Emergency

• Investigation of new Fare Markets Ends

Conclusion:

Pakistan's material industry is experiencing one of the hardest periods in decades. The
worldwide retreat which has hit the worldwide material extremely hard isn't the main source
for concern.
Genuine interior issues likewise affected Pakistan's material industry in all respects seriously.
The surprising expense of generation coming about because of a moment ascend in the vitality
costs has been the essential driver of worry for the business.
Deterioration of Pakistani rupee amid a year ago which has essentially raised the expense of
imported information sources.
Besides, twofold digit expansion and staggering expense of financing has truly influenced the
development in the material industry. Pakistan's material fares thusly have gone down amid
most recent three years as exporters can't adequately showcase their produce since purchasers
are not visiting Pakistan because of antagonistic travel conditions and it is getting increasingly
more hard for the exporters to travel abroad. Pakistan's material industry is inadequate in
research and advancement (R and D).

The creation capacity is exceptionally low due to outdated apparatus and innovation.
Pakistan is confronting mind-boggling expense of generation because of a few elements like the
climb in power tax, the expansion in financing cost, vitality emergency, downgrading of
Pakistani rupee, expanding cost of data sources,
political unsteadiness, evacuation of appropriation and inner contest.

The over all factor increment the cost of production which diminishes the fares. Fares receipts
decline from $ 10.2 B to $ 9.6 B.
The worldwide subsidence additionally hit severely the material business. Twofold digit
expansion likewise caused reduction underway in material part which cause the expansion in
joblessness level.

By the evacuation of endowment the business' generation get higher affected which
demonstrate as a last strike on industry's back.Govt ought to give sponsorship to the material
business for the survival of this industry.

Progression of 1pc questionable retention charge on import of basic crude material (cotton
and polyester staple fiber) for industry ought to be pulled back right away. This withdrawal
would empower the business to get some 3m cotton bundles yearly from outside world so as to
meet the deficiency what's more, to contend with local rivals in global market to gain remote
trade for the nation.

On inconvenience of 16% Benefited from banking and protection administrations such

development expenses would play destruction with the development of the business in
officially existing antagonistic conditions and should have been
pulled back right away.
The administration ought not pull back deals assessment and retaining charge
exclusion on apparatus and parts, as it would include cost other than liquidity issue for the
business.

References
[1] All Pakistan Textile Mills Association (APTMA) (Various Issues) Annual Report.
[2] Challenges for Pakistan. Asian Development Review Pakistan Textile Journal (2009).
[3] Pakistan, Government of (2008-09) Pakistan Economic Survey. Islamabad: Ministry of
Finance.
[4] Textile Industry— Special Report (2009).
[5] Business Recorder Pakistan –Special report (2009).
[6] Pakistan Observer-Business Survey (2008).
[7] Economic Review- NBP( 2009)
[8] Pakistan and Gulf Economist.
[9] Faisalabad Chamber of Commerce and Industries Punjab Pakistan
[10] http://www.epb.gov.pk
[11] http://www.fpcci.com.pk
[12] PAKISTAN CLOTH MERCHANT ASSOCIATION (PCMA)
[13] http://www.pakboi.gov.pk