‘Textile exports to jump 40pc as rivals lose orders to Pakistan’

KARACHI: Textile sector is bringing cheer to the country’s flailing economy, with exports set to swell to a record after gaining an edge over South Asian rivals during the pandemic, Bloomberg reported.

Textile exports are poised to surge 40 percent from a year earlier to a record $21 billion in the 12 months ending June, according to Abdul Razak Dawood, commerce adviser to Prime Minister Imran Khan.

Dawood, who was interviewed by Bloomberg at his Islamabad office, predicted the figure would expand to $26 billion in the next fiscal year, surpassing the nation’s total exports last year.

The textiles industry -which supplies everything from denim jeans to towels for buyers in the US and Europe- is one of the country’s few economic bright spots. Textiles, which amount to about 60 percent of the country’s total exports, were allowed to resume production ahead of India and Bangladesh when the pandemic first emerged in 2020, drawing orders from global brands including Target Corp and Hanesbrands Inc.

“A lot of orders actually were shifted from Bangladesh and India to Pakistan” during the pandemic,” said Dawood. “The other good thing that’s happening is we are now becoming competitive with Bangladesh. Three, four years ago, Bangladesh was really beating us.”

Dawood said the government also plans to announce a proposal next month that was likely to provide incentives for exports to new markets such as Africa, South America, and Central Asia. Pakistan is doubling down to boost textile exports through measures including tax breaks, cheap loans, and supplying electricity at rates comparable with rivals in South Asia. A 60 percent decline in the local currency against the dollar since 2018 has also helped.

“Pakistan’s exports have become competitive over the past few years,” said Ahfaz Mustafa, chief executive officer at Ismail Iqbal Securities. “There is a fixed energy tariff regime that keeps in mind regional prices, the government is much quicker to refund the money it owes exporters and there has been a giant currency devaluation.”

Dawood also said there was “very little” that could be done about the nation’s record-high imports, which were driven mainly by purchases of petroleum products such as gasoline, gas, and vaccines that were essentials.

“Pakistan will be “under pressure” if oil hits $100 a barrel, Dawood said. The adviser, however, added that he expected the food-related imports to decline this year following a better domestic crop harvest. The government is also pushing to intensify trade with Central Asia nations by signing agreements and allowing free movement of trucks.

“Trade has already grown to $120 million in six months of the current fiscal year from $14 million in the entire preceding year,” he said.