Pakistan a major textile market for India despite political differences – Part 1
Pakistan has been a major textile market for India and in Asian region. Despite decades of political differences, India is the fourth largest source for Pakistan’s total merchandised imports and second largest for textiles and clothing. Among all goods imported by Pakistan from India, textile and clothing takes a major share of 23.6% and, also accounts for 12.5% of total textiles and clothing imported in the country.
Textile industry is the largest manufacturing activity in Pakistan making it the 8th largest exporter of textile commodities in Asia. Textile sector contributes 8.5% to its GDP and employs about 45% of the total labor force in the country (and 38% of the manufacturing workers). Pakistan is the 4th largest producer of cotton in the world and has the third largest spinning capacity in Asia after China and India. In spinning capacity, Pakistan contributes 5% to the global capacity. Besides, there are 1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small units which produce textile.
In exports, textile accounts 57% of export revenues, but has been seeing it decline significantly in recent years. The Pakistan Textile Exporters Association has urged the government to take measures to ensure textile exports grow and sustain the employment provided by the sector. Further, the Pakistan Textile Mills Association has demanded removal of duty on cotton imports and a rebate of five percent on textile exports. This plea has come at a time when about 110 mills were shut down due to various barriers to growth including the energy shortage.
Although cotton is the largest fibre of textile production, the industry has persistently facing shortage of white fibre, which has been hurting textile growth. There have been frequent crop failures which also impede investments and expansion of textile industry, despite it is the largest generator of employment in the country. The spinning activity is still limited to coarser or regular count yarns and has miniscule ability to produce finer count yarns.
The recent sharp depreciation in the PakRe, has made export cheaper, but it also made raw material imports equally costlier. However, with home grown cotton, textile industry has significant benefits of the currency depreciation.
For India, Pakistan is the third largest for cotton fibre and cotton yarns, 10th largest for other spun yarns, ninth largest for man-made fibres and 34th in filament yarns. Thus, Pakistan ranks among the top 10 markets for basic textiles exports for India.
(To be concluded)
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