Arsalan Ali

The knitwear and garment industry in Pakistan has immense potential for significant growth if it focuses on value addition, product diversification, and innovation. Dr Tanveer Hussain, Rector at the National Textile University, Faisalabad, said while talking to WealthPK that rising gas prices and withdrawal of concessionary tariffs on gas have placed the industry under strain, impacting its ability to sustain growth. “Regionally competitive energy tariff (RCET) would help increase the export of textile products,” he emphasised. Dr Tanveer mentioned that fundamental factors contributing to Pakistan's failure to achieve the desired share in textile exports include the lack of value addition, product diversification, and innovation within the industry.

“Comparative analysis between Pakistan and Bangladesh reveals the key reason behind Bangladesh's success in higher textile exports is value addition,” he pointed out. Dr Tanveer said that during the fiscal year 2021-22, garments accounted for 94% of Bangladesh's total textile exports, which amounted to an impressive $46 billion. In contrast, garments only accounted for 45% of Pakistan's textile exports of $19.3 billion. He emphasised that the global garments market, valued at approximately $490 billion, represents a missed opportunity for Pakistan. “Traditionally, Pakistan has focused on home textile market worth around $80 billion, inadvertently neglecting the potential of the garments market,” he said.

He said Bangladesh and Vietnam strategically shifted their focus to garments, with Bangladesh boasting over 4,000 garment units compared to Pakistan's count of fewer than 1,000 units. According to Trade Development Authority of Pakistan (TDAP), during the fiscal year 2021-22, the knitwear industry in Pakistan experienced a notable upswing, with exports growing by 34% and reaching an impressive value of $5.1 billion. According to Pakistan Bureau of Statistics (PBS), April 2023 witnessed a worrisome decline in knitwear exports. The exports plummeted 34.07% to $321.763 million, compared to $488.070 million during the same month of the previous year.

This downward trend persisted over the first 10 months of the current fiscal year, with knitwear exports amounting to $3.712 billion, marking an 11.99% decrease compared to the corresponding period of the previous year, which saw exports worth $4.217 billion. The exports of ready-made garments during April 2023 also faced a decline of 29.45% at $247.428 million compared to $350.721 million during the same month of the previous year. Similarly, during July-April FY23, the total exports of ready-made garments amounted to $2.904 billion, indicating a decrease of 9.63% compared to $3.214 billion during the corresponding period of the previous year.

The decline in exports can be partially attributed to reduced demand from key export destinations such as the United States, the United Kingdom, the Netherlands, Spain, and Germany. This reduced demand resulted from the withdrawal of concessions on gas and RLNG supplies, impacting not only the knitwear sector, but also the garment industry as a whole. Pakistan's knitwear and garment export industry faces stiff competition from Bangladesh, a major player in the global market. To maintain market share and competitiveness, Pakistan must address these challenges effectively.

Rafiq Habib Godil, Chairman of Pakistan Knitwear and Sweater Exporters Association (PAKSEA), has drawn attention towards adverse consequences of escalating gas prices and the removal of concessions on gas tariffs, which have a negative impact on the textile sector. The excessive costs incurred in production make the sector unsustainable, placing a heavy burden on export-oriented industries. He called upon the government to address the situation and provide assistance to the export-oriented sectors.

Credit : Independent News Pakistan-WealthPk