Ayesha Saba

Pakistan’s textile sector faces multiple challenges. This situation calls for long-term sustainable policies focusing on subsidies and efficiency.

Talking to WealthPK, Umar Khayam, Assistant Chief of Industries & Commerce Section of the Ministry of Planning, Development and Special Initiatives (PD&SI), stressed that the subsidies, when strategically implemented, could act as a lifeline for the sector. "The textile industry faces high energy costs, unreliable power supply, and a tough international competition. Subsidies on electricity, gas, and raw materials can alleviate some of these burdens, enabling the manufacturers to compete on pricing in the global markets."

Additionally, he advocated export-focused subsidies that reward the firms for diversifying their products and exploring new markets, which could counterbalance reliance on traditional buyers like Europe and the United States. Without addressing inefficiencies in the production processes, subsidies alone will not create long-term sustainability, he said. He recommended policies that incentivize the firms to invest in modern technologies, workforce training, and research and development.

These measures can increase productivity and improve the quality of output, making Pakistani textiles more appealing internationally. Umar highlighted examples from countries like Bangladesh and Vietnam, where the policy-driven modernization has significantly boosted the export sector’s performance. He shared his concerns that the buyers were increasingly prioritizing stability, reliability, and diversification – the areas where Pakistan currently falls behind. “International buyers need assurance that their supply chains won’t be disrupted due to the political or economic turmoil.

Unfortunately, Pakistan’s current situation does not inspire that confidence,” he said. He suggested that Pakistan must prioritize restoring the buyer confidence through measures like ensuring political stability, improving infrastructure, and offering incentives for export-oriented businesses. Additionally, there is an urgent need to adopt modern production techniques and explore the untapped markets, he added.  Talking to WealthPK, Ali Raza, a trade analyst at the Trade Development Authority of Pakistan (TDAP), said energy shortages and frequent price hikes had placed the textile sector under severe strain.

He argued for the introduction of dedicated industrial zones with uninterrupted power supply at subsidized rates to provide a stable operating environment for the manufacturers. In addition, renewable energy initiatives can reduce the long-term energy costs and environmental impact. He suggested that the path to revival required collective efforts from the stakeholders, including the government, industry leaders, and trade bodies.

The policies must be designed with a long-term vision to ensure that the subsidies and efficiency measures are sustainable and effective. While challenges abound, the sector's potential remains immense. With the right mix of support and reform, the textile industry can once again position itself as a formidable player in the global market, driving economic growth and job creation.

Credit: INP-WealthPk