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Textiles

Pakistan is the world’s 4th largest producer and 3rd largest consumer of cotton. The Textile and Clothing Industry has been the main driver of the economy for the last 50 years in terms of foreign currency earnings and jobs creation. The Textile and Clothing Industry will continue to be an important engine for future growth of the economy; there is no alternative industry or service sector that has the potential to benefit the economy with foreign currency earnings and new job creation, especially if synergy is developed among different sub sectors and efforts are made to aggressively grow the Ready-made Clothing Sector. Pakistan’s Textile Industry had proved its strength in global market during the last four decades. It has proved its strength even in post quota era by not only sustaining its position but, also showing growth during 2005 to 2007, but declined to $11.1 billion in 2008 due to financial and economic meltdown globally. The Garment Sector & especially the Knit Garment Sector need special focus in future policies. The industry consists of large-scale organized sector and a highly fragmented cottage / small-scale sector. The various sectors that are a part of the textile value chain are: Spinning, most of the spinning industry operates in an organized manner with in-house weaving, dyeing and finishing facilities. Weaving comprises of small and medium sized entities

  • Despite being 4th largest cotton producer in the world, Pakistan’s comparative advantage is marginalized by low value added exports as reflected in the country’s 12th rank in global textile exports by value.
  • Significant opportunities exist in setting up value addition units, such as apparel lines to build strong sector base.
  • The textile sector has primarily been outward looking i.e. export focused, however with rising quantity and quality of domestic consumption, the industry would need to expand capacity to meet local demand and thus provide investment opportunities.
  • The textile sector enjoys a pivotal position in the exports of Pakistan. In Asia, Pakistan is the 8th largest exporter of textile products
  • The contribution of this industry to the total GDP is 8.5%. It provides employment to about 15 million people, 30% of the country workforce of about 49million
  • The annual volume of total world textile trade is US$18 trillion which is growing at 2.5 percent. Out of it, Pakistan’s share is less than one percent
  • The development of the Manufacturing Sector has been given the highest priority since Pakistan’s founding with major stress on Agro-Based Industries
  • For Pakistan which was one of the leading producers of cotton in the world, the development of a Textile Industry making full use of its abundant resources of cotton has been a priority area towards industrialization
  • At present, there are 1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small units which produce textile products

The first Investment Policy by Board of Investment (BOI) was given in 1997 which opened services, social, infrastructure and agriculture sectors for foreign and local investors. It was a major step forward for integration of Pakistan’s economy into international markets as prior to this policy; foreign investment was restricted to manufacturing sector only. The 1997 Policy laid a solid foundation for the gains in FDI inflows experienced over the subsequent decade.

Foreign Direct Investment in Pakistan increased by 2761.10 USD Million in 2016. Foreign Direct Investment in Pakistan averaged 2651.26 USD Million from 2010 until 2016, reaching an all time high of 3184.30 USD Million in 2010 and a record low of 2099.10 USD Million in 2012.

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Sectors

Pakistan has a fast-growing local produce and manufacturing sector tha accounts for major percentage of its exports.