According to a report by Pakistan’s “Daily Times” on May 20, the Central Bank of Pakistan stated that the main reason for the weakness in textile industry exports was structural problems, rather than energy issues and security risks claimed by the industry. Exports of high value-added products have maintained an upward trend, but the decline in exports of low value-added products has dragged down Pakistan’s textile industry exports. In the first half of this fiscal year, textile industry exports fell by 4% year-on-year. Due to reduced demand, exports of low value-added products such as cotton textiles to China, Bangladesh, and Turkey have declined, while exports of high value-added products such as knitwear and ready-made garments have increased thanks to the EU’s Generalized System of Preferences Plus (GSPPlus) status.
The chairman of the All Pakistan Textile Manufacturing Association (APTMA) said that the Pakistani government’s lack of support for the textile industry has led to reduced production capacity and highlighted structural problems. First, there is a lack of tax and other supporting policies. The Pakistani government imposed a natural gas base development tax of 30% per million thermal units (mmbtu) on the use of domestic natural gas in the textile industry, resulting in the closure of textile factories accounting for approximately 30% of production capacity. Second, the equipment is outdated and in urgent need of modernization. Pakistan’s textile industry uses old machines from ten years ago and is in urgent need of upgrading and modernization to adapt to the needs of the international market. But modernization cannot be accomplished without state support. He appealed to the government to relax the import tax structure so that textile players can import the latest equipment. Structural issues have led to weak exports in Pakistan’s textile industry.