The Express Tribune Article.

The share of Pakistan’s textile industry in domestic commerce has surpassed the sector’s export figures, according to data compiled by the All Pakistan Textile Mills Association (Aptma) – an umbrella organisation of textile manufacturers.

Textile sales in the local market currently stand at $13.7 billion out of the combined local and foreign sales of $26 billion, Aptma revealed. Textile exports for the year 2016-17 stood at $12.3 billion.

The organisation said the textile industry’s share in the local market was still below potential since it constituted merely 32% of the textile items bought by consumers. Smuggled or informal (24%) and imported goods (44%) make up the rest of the textile products being sold in Pakistan.

According to Aptma statistics, the textile sector contributes 8.5% to Pakistan’s total economic output of $300 billion. The sector is underperforming both in domestic as well as in export markets because of several structural and external challenges. Aptma said Pakistan’s global market share had declined from 2.2% to 1.7%, a fall of 23% over the past few years. Regional competitors including India, Bangladesh and Vietnam have, however, managed to increase their exports to $36.4 billion, $31 billion and $31.5 billion respectively by 2016 from $27.7 billion, $19 billion and $15.2 billion in 2010.

Apart from these issues, the textile sector, in general, was facing several challenges including outdated technology, Aptma representatives said. While several manufacturers have upgraded their production units by installing technologically advanced machinery and equipment, the trend has failed to pick up momentum across the entire sector.

Pakistan’s textile industry has lost technological advantage over its competitors as no major investments have been made over the past decade. Industry sources identify investor reluctance to make new investments due to high cost of doing business as the reason behind this shortfall. “The industry has lost 15% of the technological edge it had over its competitors,” said an Aptma member.

The textile sector saw investment of $1 billion in machinery in 2005-06. Annual investments since then have come down with a mere $560 million invested in 2016-17, down 44% from 2005-06.

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