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April 26, 2015

‘Outdated machinery impacting textile exports’

LAHORE: Besides shortage and high cost of energy, the inability of the textile sector to upgrade its technology has battered the competitiveness of the industry against neighbouring economies that are regularly adding efficient machinery, experts have suggested on Monday.
A textile mill operating on 2004-05 technology with 25,000 spindles employees 500 workers and consumes 2.6 MW power to produce yarn, said Gohar Ejaz the group leader All Pakistan Textile Mills Association (APTMA), however, latest spindles added by Indians, Chinese and Bangladeshis produce more yarn and operate with only 200 worker and need 1.5 MW power for full operation. “With power and labor cost higher than India and Bangladesh is it possible for our mills to compete globally?” he wondered. Successive governments in Pakistan formulated textile policies in consultation with textile players but never implemented them in letter and spirit while India spent on the textile sector that has boosted its exports, he said.
To encourage technical upgrades India provided $3.5 billion from 2007-12 under technology upgradation fund granting 5.0 percent interest subsidy on the import of new machines and many other incentives for handloom, textile parks, and human resource development.
The actual amount spent was 115 percent of total allocation.
While Pakistan under Textile policy 2009-13 announced similar incentives worth $2.3 billion and when the policy expired only 15 percent of the announced amount was spent.
Indian government announced another five year textile policy for 2012-2017 worth $5 billion and the policy is being implemented according to the plan. The Pakistani government also announced a similar Textile Policy 2014-2019 worth $640 million only, however, no notification in this regards has been issued yet.
The group leader said the result of this contrasting policy implementation was that during the period 2008-2013, India added 14.2 million spindles and 36,410 shuttleless looms, while during the same period Pakistan added only one million spindles and 1,319 shuttleless looms. Even Bangladesh was able to add 1.98 million spindles and 22,370 shuttleless looms.
He said this is the main reason the textile exports from Pakistan have remained stagnant at 13.5 billion during last five years while Indian textile exports have increased from $16 billion to $39 billion.
Chairman APTMA S.M Tanveer said Pakistan is rapidly losing its textile market. In 2006 the share in global textiles and clothing exports of Bangladesh was 1.9 percent, India 3.4 percent and Pakistan 2.2 percent. This share increased for Bangladesh to 3.3 percent in 2013 and is further increasing. It increased for India to 4.70 percent and is further increasing but it has declined for Pakistan to 1.8 percent and is further declining.
This should be a point of concern for the policy makers as textiles are mainstay of our economy. He warned that if the current trends continue Pakistani textile and clothing exports would inch up to only $18 billion but its share in global textile exports would further decline to 1.50 percent.
The share of Bangladesh and India is expected to increase to 6.0 percent and 7.0 percent respectively translating into exports of $66 billion and $80 billion, he added.