Textile Industry of Pakistan

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Table of Contents
Executive Summary............................................................................................... 4
History of Pakistan’s Textile Industry.....................................................................5
Role of Pakistan’s Textile Industry...................................................................6
Structure of Pakistan’s Textile Industry..................................................................7
Size..................................................................................................................... 8
Capital or Labor Intensive................................................................................... 9
Up-Stream Sector............................................................................................... 9
Mid-Stream Sector............................................................................................ 10
Importance of Thread Industry in Pakistan.......................................................11
Down-Stream Sector......................................................................................... 13
Challenges Faced by the Garment Industry in Pakistan....................................14
Overview of World’s Textile Sector....................................................................15
The Textile Value Chain..................................................................................... 17
New Technologies............................................................................................. 18
Key Firms of Pakistan’s Textile Industry...............................................................22
Nishat Mills Limited....................................................................................... 22
Gul Ahmed Textile Mills.................................................................................. 22
Lucky Textile Mills.......................................................................................... 22
Al-Karam Textile Mills..................................................................................... 23
Market Competence:............................................................................................ 24
In-depth Analysis of the Growth Patterns in Pakistan's Textile Industry Firm
Growth................................................................................................................. 25
Value added................................................................................................... 25
Production Costs............................................................................................ 26
Market Demand............................................................................................. 26
Export Performance....................................................................................... 26
Graph 1: Distribution of Value Added............................................................26
Real-Life Context........................................................................................... 27
Graph 2: Distribution of Number of Employees.............................................28
Real-Life Context........................................................................................... 29
Graph 3: Distribution of Employee Growth Rates..........................................29
Real-Life Context........................................................................................... 30
General Trends and Real-Life Incidents..........................................................30
SWOT Analysis..................................................................................................... 31
Strengths....................................................................................................... 31
Weaknesses................................................................................................... 32
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 Opportunities................................................................................................. 33
Threats.......................................................................................................... 34
Solutions and Recommendations.........................................................................36
Investing in Research & Development:..........................................................36
Provision of Government Subsidies...............................................................36
Improving Energy Infrastructure....................................................................36
Pakistan’s Trade Policy and Agreements........................................................37
Conclusion........................................................................................................... 38
References........................................................................................................... 40

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Table of Figures
Figure 1: Export Destinations Growth..................................................................13
Figure 2: Exports of textile industry products over the years.............................15
Figure 3: Trend of World’s Exports of Textile and Garments Products (HS 50 to 63)
............................................................................................................................ 16
Figure 4: World’s Export Value at HS 2 Digit Code (2019)....................................17
Figure 5: Export of Pakistan Textiles (US $ Million)...............................................17
Figure 6: : Overview of processes involved in the Textile Industry (Halog & Abbas,
2021)................................................................................................................... 19
Figure 7: Textile Value Chain................................................................................ 19
Figure 8: Distribution of Value Added...................................................................28
Figure 9: Distribution of Number of Employees...................................................29
Figure 10: Laplace Distribution of Employee Growth Rates.................................30

Executive Summary
The textile industry in Pakistan has a rich history and plays a pivotal role in the nation's
economy, contributing significantly to GDP, employment, and trade. This report provides a
comprehensive analysis of various aspects of the industry, including its historical
development, current status, and future prospects.

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Introduction: The textile industry in Pakistan has a long-standing tradition, serving as a key
driver of economic growth and development. Its importance extends beyond domestic
borders, with Pakistan being a major player in the global textile market.

Contribution to GDP, Employment, and Trade: The industry makes a substantial

contribution to Pakistan's GDP, employment, and trade balance. With a vast network of
weaving, spinning, and thread manufacturing units, it remains a vital source of employment
for millions of people. Moreover, textile exports play a crucial role in Pakistan's trade
dynamics, generating significant revenue and foreign exchange earnings.

Components of the Industry: The textile industry comprises various components, including
weaving, spinning, and thread manufacturing. Key firms in the industry, with their extensive
market power structure and value-added services, drive growth and innovation within the
sector.

Market Power Structure and Firm Value Added: An analysis of the market power
structure reveals the dominance of major textile firms, which add significant value to the
industry through technological advancements, product diversification, and market expansion
strategies.

Growth Rate and SWOT Analysis: Despite facing challenges, the textile industry in
Pakistan continues to grow steadily, driven by factors such as government support, and global
demand. A detailed SWOT analysis highlights the industry's strengths, weaknesses,
opportunities, and threats, providing valuable insights for strategic planning

Solutions and Conclusion: To capitalize on its strengths and overcome challenges, the
textile industry in Pakistan must focus on enhancing productivity, improving quality
standards, and fostering innovation. By leveraging its competitive advantages and addressing
key issues, the industry can sustain its growth and maintain its position as a global leader in
the textile market.

History of Pakistan’s Textile Industry

Since 1947, Pakistan's manufacturing industry experienced significant growth, largely driven
by the expansion of the textile sector. During the initial years after its formation, the industry
base was faced with problems like the lack of skilled labor, infrastructure challenges, capital
scarcity and political instability. Pakistan’s manufacturing sector, however, witnessed a

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steady growth rate of 9.9% between 1947 and 1958, particularly due to the increased FDIs
and effective implementation of an import substitution policy during this period (Iqbal et al.,
2010). By the 1960s, Pakistan had a vast domestic production and stood among the top textile
producers in the world.

Pakistan was faced with both a series of challenges and opportunities from the 1990s up until
the 2000s primarily due to global price shocks, significant political instability, and a period of
economic liberalization under Nawaz Sharif’s government. Between 1973 and 1992,
Pakistan's position was overtaken by many neighboring countries, leading to the closure of 71
spinning units. Pakistan soon managed to increase its export of value-added products, which
rose from 53.9% to 57.4% in 2002. Pakistan also managed to increase its exports from US$
5.5 billion in 2000-2001 to US$ 5.7 billion in 2003, indicating a growth rate of 0.69%. This
further grew by 2.5% in 2004 and then by 4% of the preceding year in 2005. (Khan & Khan,
2010)

Export rates then grew negatively between 2006 and 2007 due to the energy crisis and the
consequently increased operational costs. Moreover, the judicial crisis followed by Pervez
Musharraf’s resignation in 2007 restricted operations as a result of uncertain economic and
political climates.

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Role of Pakistan’s Textile Industry
(gdp, value added, employment)

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Structure of Pakistan’s Textile Industry
The textile industry is Pakistan’s largest industry, having 65% of exports, and almost 45% of
the employed labor force. Additionally, Pakistan is the 4th largest cotton producer and the 8th
largest exporter in Asia (Hussain S. A., 2006). The All-Pakistan Textile Mills Association
(APTMA) is the main national trade association of the organized sector in Pakistan. With its
focus on cotton, the association tries to solve challenges relating to trade, commerce, and
textile production. As of April 2024, there are currently 1267 textile mills in Pakistan, with
most of the mills operating in Punjab. The top five textile mills include Nishat Mills Limited,
Artistic Millners Limited, Gul Ahmed Textile Mills Limited, Kohinoor Textile Mills Limited,
and Al Karam Textile Mills Pvt. Limited.

Pakistan’s textile industry’s structure mainly comprises of small and medium sized
enterprises for example Gul Ahmed Textile Mills, Sapphire Textile Mills Limited, Nishat
Mills Limited, Interloop Limited, Siddiq sons Limited, Ravi Textile Mills etc. In Pakistan,
there are more than 500,000 SMES in the textile industry and they produce about 85% of
textile production. Additionally Vertical and horizontal textile manufacturing are strategies
that businesses follow for gaining competitive edge. The structure of textile industry in
Pakistan also involved vertical integration, which involves many firms practicing from
spinning to weaving to finishing. It is a combination of both forward and backward
integration of textile production units. In comparison, horizontal textile mills are planned by
focusing on the demand created by other companies. This demand is the needs of various
companies to make final textile product for either international or national markets. These
firm structures help in reducing production costs, giving better opportunities for growth,
promoting sustainable business growth, creating economies of scales and scope, etc (Malik,
2021).

Right now, the textile industry in Pakistan consists of a large-scale organized sector along
with a highly fragmented cottage and small-scale sector. The organized sector typically
includes integrated textile mills, containing many spinning units but a limited number of
shuttle-less loom units. Also, the downstream industry, which is basically weaving, finishing,
garments, towels, and hosiery with significant export potential, operates mainly in the
unorganized sector. However, despite this, some units have expanded internationally too.

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In response to high export demand, the spinning sector has expanded and increased cotton
production, followed by growth in the weaving and processing sectors. Air-jet weaving units
have been set up either independently or alongside spinning or processing units. Some
clothing units are practicing backward integration, while spinning units are developing
weaving, finishing, and assembly capabilities to complete the production chain. Both the
textile and clothing sectors support each other, with horizontal and vertical integration
occurring either under the same management or through business partnerships

A firm’s structure varies as it depends on the type and size of the company. Following are
some examples of structures in the textile industry of Pakistan:

-Large integrated textile mills are vertically integrated companies that are involved in their
own spinning, weaving, dyeing, and finishing activities. For example, Sapphire Textile Mills,
Kohinoor Textile Mills, Gul Ahmed Textile Mills Limited, and Nishat Mills Limited (Kiron,
2022).

-Small and Medium-sized enterprises focus on producing specific products such as towels or
denim fabrics. These firm structures are involved in buying raw materials from other
suppliers or outsourcing, for example, Yunus Textile Mills and Soorty Enterprise.

-Cottage Industries operate from home-based workshops and are mainly involved in small-
scale production units. These firms are involved in the making of embroidery or handmade
products, for example, Chitral Women’s Handicrafts and Ajrak Crafts.

-Textile trading companies do not have their own manufacturing facilities. However, they
work as third parties between buyers and sellers of textile products for example Khawaja
Textile.

Size
This Industry has an 8.5% contribution to the GDP (Wikipedia) and because of Pakistan’s
abundant value chain available from cotton to ginning, spinning, fabric, dyeing, and finishing
and garments the country is ranked 5th in the world in terms of yarn production. It
contributes around 1/4 of value-added products and provides employment to about 40% of
the industrial workforce. In terms of national exports textiles have an average of about 60%
share. Due to the availability of a complete value chain for this industry in the country, it
houses 13.41 million spindles, 198,801 rotors, 375,000 power looms, and 28.500 shuttleless
looms and hence, has also become the 3rd largest hosiery manufacturer as well (PJBF, 2016).

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It supplies to renowned brands like Nike, Adidas & Puma, etc. Overall, globally the textile
market, estimated at $1 trillion in 2020, is expected to reach new heights of around $1.5
trillion by 2027 at CAGR 4.3% (2020-2027). (International Finance Corporation, 2020).

Capital or Labor Intensive

Out of 60% of the textile exports, 46% are accountable for manufacturing. This sector is also
one of the most employed with around 38% of the manufacturing labor force. It is also
important to notice that $4 billion of machinery has been imported into the country for the
textile and garment sector in the last few years. (Fibre2Fashion, 2007) It can be noticed and
concluded that the industry mainly relies on machinery to produce the fabrics and to print
designs on them. The labor-intensive aspect of the manufacturing sector can be divided into
three main categories: preproduction, production, and postproduction. During preproduction,
planning, sample development and approvals, sourcing, and production scheduling are done.
In the production phase, fabrics are spread, cut, and sewn. Following that, during
postproduction pressing, inspection, folding, and pacing are performed to prepare the goods
for consumers. However, in large-scale firms, machinery is used to cut back on production
time and costs (Suh, 2020).

Up-Stream Sector
-The Spinning Industry:

The spinning and weaving industries are upstream in the production chain. The organized
sector is dominated by the spinning industry, which has about 8.23 million spindles. Spinners
have historically had a firm hold on the industry, and the significant increase in spinning
capacity can be attributed to their focus on exporting this low-value product category.

• Local Industry Overview:

Pakistan has 477 spinning mills, most of them are well-organized and have a long operational
history. The industry is robust, with many producers consistently delivering high-quality
goods. In the fiscal year 2021 (FY21), as Pakistan emerged from covid, yarn production
increased by 12%, reaching 3.4 million metric tonnes. Yarn exports had a total of 391,000
metric tonnes, accounting for 11% of total production, with the major part exported to China.
The local textile value chain utilizes 89% of domestically produced cotton yarn in the
weaving sector, driven by an increase in demand for finished goods in the local market due to

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increased export orders. Cotton yarn prices increased by an average of 20% during FY21,
contributing to the market's growth. The cotton yarn market size was estimated at PKR 847
billion in FY20, a 24% increase from FY19.

• Global Industry Overview:

The COVID-19 caused a 3% decline in the global spinning industry market, from USD 77.2
billion in CY19 to USD 74.9 billion in CY20. With 6.4 million metric tones produced in the
2019 fiscal year, China was the top producer and consumer of cotton yarn, followed by India
and Pakistan. 72% of the cotton yarn produced globally came from these three nations. Due
to shifting consumer habits, an increase in population and disposable income, and rising
demand for clothing and home furnishings, the Asia-Pacific region currently leads the world
yarn market, followed by North America. As the world recovers from the pandemic, the
industry is anticipated to expand due to quick urbanization, rising industry demand, and
blended yarn varieties.

-Processing:

A polymer must first be transformed into a liquid or semiliquid state before being
transformed into fiber, either by dissolving it in a solvent or melting it with heat. The long
molecules are dissociated from one another during this process, enabling independent
movement. Pouring the resulting liquid through tiny holes in a spinneret’s device produces
fine jets of liquid that solidify to form solid rods with all the outward appearances of an
extremely long filament. Extruding a liquid fiber-forming polymer and then hardening it to
create filaments is known as spinning. Diverse spinning processes, such as solution (wet or
dry) spinning, melt spinning, and gel spinning (another variation of solution spinning), are
used to create man-made fiber. The production of fabric comes next. Usually, fabrics are
made by knitting, weaving, or manufacturing non-woven fabrics. To prevent the yarn from
breaking during these processes, it is also crucial to strengthen it and reduce friction. Sizing
chemicals and lubricants are consequently added.

Mid-Stream Sector
-Weaving:

The process of turning yarn into fabric is known as weaving, and the machine used for
weaving is known as a loom. The three fundamental actions of the procedure are shedding,
picking, and beating. To create a space for the weft thread to pass through during shedding,

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the warp threads are divided into two groups. The weft thread is moved through the opening
left by the shedding process during the picking process. Finally, the woven fabric is firmly
pushed downward during beating by a reed-like tool.

-Thread Industry:

Pakistan's thread industry has emerged as a vital contributor to the country's economy, it has a
big role in the GDP growth and employment generation for the country. The renowned status
of this industry can be attributed to elements like a skilled labor force in this sector,
accessibility to an abundance of raw materials, economical production techniques, and a
dedication to international quality standards due to which we are known as "thread makers"
globally.

Importance of Thread Industry in Pakistan

The thread industry in Pakistan holds immense significance, both domestically and
internationally, within the larger textile sector. Its renowned status and ongoing success can
be attributed to several important factors that boosted its importance and influence. The long
history of textile manufacturing in Pakistan has provided a solid foundation for the expansion
and prominence of the thread industry. The nation has a long history of talented workers who
have perfected their art over the years, passing down their knowledge in various facets of
thread manufacturing. These knowledgeable craftspeople have established themselves as the
backbone of the sector, guaranteeing the production of threads of the highest caliber that
adhere to exacting international standards. They are skilled in spinning, dyeing, and finishing
techniques. Pakistan has earned a reputation as a trustworthy supplier of top-notch thread
products thanks to its attention to detail and dedication to craftsmanship. In 2021, Pakistan
exported $5.56M in Cotton Sewing Thread, making it the 9th largest exporter of Cotton
Sewing Thread in the world. At the same year, Cotton Sewing Thread was the 260 th most
exported product in Pakistan. The main destination of Cotton Sewing Thread exports from
Pakistan are Nigeria ($1.21M), South Korea ($951k), Italy ($753k), Vietnam ($617k), and
Kenya ($542k). The fastest growing export markets for Cotton Sewing Thread of Pakistan
between 2020 and 2021 were South Korea ($951k), Nigeria ($597k), and Italy ($416k).
(OEC, 2021).

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 Figure 1: Export Destinations Growth

Due to its advantageous geographic location, Pakistan has easy access to a plentiful supply of
raw materials, especially cotton. The main ingredient in the production of thread is cotton,
and Pakistan's ideal cotton-growing conditions guarantee a steady supply. This benefit has
helped the industry grow and remain competitive, along with the availability of other raw
materials. The industry's capacity to offer competitive prices in the global textile market is
largely due to the manufacturers' ability to maintain cost-effective production processes.
Another important aspect of the thread industry is its unwavering dedication to quality
assurance and compliance with international standards. Pakistani manufacturers place a high
priority on quality throughout the entire manufacturing process, making certain that the
threads they produce adhere to the exacting standards established by foreign customers. The
industry's commitment to upholding consistent quality has given it a reputation for
dependability and excellence, boosting its global competitiveness and drawing in customers
from other countries who are looking for high-quality threads.

Moreover, the thread industry has benefitted from significant support and initiatives from the
Pakistani government. The government's interventions, such as providing subsidies,

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improving infrastructure, and facilitating foreign investments, have played a crucial role in
propelling the industry forward. These efforts have not only boosted production capacity but
have also encouraged innovation an technological advancements within the sector. The
government's support has further solidified Pakistan's position as a leading supplier in the
global textile value chain, attracting international buyers and fostering overall economic
growth. Additionally, the Pakistani government's substantial assistance and initiatives have
benefited the thread industry. The government's interventions, including the provision of
subsidies, the development of infrastructure, and the facilitation of foreign investment, have
been instrumental in advancing the sector. For e.g. In 2021the government invested $5 billion
the textile industry to establish 100 more units, to increase growth in the industry in terms of
more job opportunities as well as “increase textile exports to $25 billion by 2025” as said by
Topline Securities analyst Saad Ziker. (Hanif, 2021) In addition to increasing production
capacity, these initiatives have sparked technological development and innovation in the
industry. With the assistance of the government, Pakistan's position as a top supplier in the
global textile value chain has become even more secure, luring foreign customers, and
promoting overall economic expansion.

Down-Stream Sector
-Garment:

The importance of the garment sector can be attributed to its room for expansion. Pakistan's
current market share in the global apparel industry is 1.10%, which leaves huge room for
improvement. Industry can grow and gain a larger share of the global market with the right
investments and government policies. The industry also makes a significant contribution to
the economic empowerment of women in the nation. Women make up more than 60% of the
workforce in Pakistan's garment sector (Clean Clothes Campaign, 2015), giving them access
to jobs that allow them to support their families, make a living, and become financially
independent. Pakistan's large labor force and plentiful supply of raw cotton presents a
significant growth opportunity for the apparel sector. It may develop into a major driver of
economic development if supported well by the government. The garment industry has grown
over the years, but it still comprises lower market share than it has the potential of, and amin
textile products that Pakistan produces are like home textiles, towels, bedsheet etc.

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 Figure 2: Exports of textile industry products over the years

The Pakistani garment industry does, however, face difficulties that have slowed its
development. To unlock the growth of the apparel industry and further solidify Pakistan's
position in the global textile market, it can be possible to make strategic improvements by
looking at the dynamics of these industries. By unlocking the full potential of its textile
industry, Pakistan can promote economic development, the creation of jobs, and solidify its
place as a major player in the world textile market. We can gain insights into the
opportunities and challenges that shape Pakistan's garment sector and point us in the direction
of a sustainable and thriving industry by looking at these industry dynamics.

Challenges Faced by the Garment Industry in Pakistan

While the thread industry in Pakistan has achieved significant success, the garment industry
faces several challenges that have staggered its growth in the industry and the potential for
advancement. The lack of skilled labor is one of the biggest issues the Pakistani garment
industry is currently dealing with. The sector requires a highly skilled workforce that can
adhere to global quality standards and meet consumers' changing needs. However, there is a
shortage of skilled workers in the nation, making it difficult to meet the demands of the
sector. A significant investment in initiatives for skill development and vocational training are
required to meet this challenge. The absence of infrastructure and policies that are supportive
is another major issue the Pakistani garment industry faces. The establishment of a supportive
business environment is essential for the industry to prosper. Additionally, Pakistan's garment
industry faces difficulties because of a lack of vertical integration and outdated production
techniques. Many manufacturers still use labor-intensive methods, which reduces their ability

15
to compete on the world market. The industry faces difficulties with cost control and on-time
production due to its over-reliance on imported fabrics. There is a need for investment in
technology and equipment to solve these problems.

Overview of World’s Textile Sector

The international demand and supply of textile products can be gauged by analyzing the
import and export values of various HS codes from HS 50 to HS 63. These 14 HS codes
encompass all types of textile goods. By examining these codes, we can estimate global
textile demand (imports) and supply (exports). Figure xyz illustrates a significant rise in the
world's textile sector, which surged rapidly after the 2007-2008 global economic crisis.
However, there was a notable decline of approximately US$60 billion in 2015. In terms of
market size, the textile sector's exports were valued at approximately US$821 billion in 2019.
Over the past two decades, textile exports have grown at an average annual rate of about 5
percent. HS code 61 and HS code 62 are the primary contributors to trade volume, accounting
for approximately US$904 billion out of a total US$1,565 billion (Figure abc), indicating
product diversification on a global scale. In addition to substantial trade in finished textile
goods (HS 61, 62, and 63), economies also trade in cotton, synthetic fibers, and other raw
materials (HS 52, 54, 55, 60, etc.) to support domestic production.

Figure 3: Trend of World’s Exports of Textile and Garments Products (HS

50 to 63)

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 Figure 4: World’s Export Value at HS 2 Digit Code (2019)

Figure 5: Export of Pakistan Textiles (US $ Million)

According to the Finance Division (2021) (the above table), the majority of Pakistan's textile
exports come from cotton and cotton-based textiles (97 percent), with synthetic textiles (2.5
percent) and woolen textiles (0.433 percent) contributing relatively small proportions.
Despite having a well-developed infrastructure, Pakistan is underperforming in the global
market for textile goods. The industry faces challenges related to diversification (Tanveer and
Zafar, 2012), heavily relying on cotton-based textiles (Cororaton and Orden, 2008). While
global textile dynamics are evolving to meet changing demands, Pakistan remains dependent
on relatively stagnant and vulnerable materials. Cotton-based textiles are particularly
susceptible to fluctuations in crop output and regional weather conditions (Batool and Saeed,
2018). Moreover, Naureen and Mahmood (2016) identified several macroeconomic factors
that influence export diversification, including foreign direct investment, domestic
investment, and competitiveness, real depreciation of the domestic currency, financial sector
development, and institutional strength. This study highlights the crucial importance of
diversifying to align with the evolving needs of the global market.

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The Textile Value Chain
The Textile-Value chain consists of five sub-sectors: ginning, spinning, weaving and knitting,
dyeing and finishing, and garment processing. Around 60% of ginning units are in Punjab and
40% in Sindh. This segment primarily operated in medium and small-scale-sized units and is
not very organized. During this process, the cotton seed is purified from any form of dirt and
its seeds. This process includes 3 major stages including cleaning, drying, and separating the
cotton fibers from the seed. Pakistan is striving in the spinning sector as it is currently the 5th
largest producer of yarn, producing around 3 billion kgs annually, and it is the 2nd largest
yarn exporter in the world. This process includes carding, drawing, roving, and spinning. The
cotton fibers are first straightened out to remove any remaining potential impurities, then the
fibers are stretched to create continuous strands of fiber which are then put unto drawing
frames, then the drawn fibers are twisted into long, thin strands called roving, and finally, in
the spinning stage the yarn is spun and there a variety of machines to choose from to obtain
the desired level of thickness. The transportation of yarn preparation to fabric preparation is
also incorporated. The weaving and dyeing sector itself is split into 3 subparts: Integrated,
Independent Weaving Units, and Power Loom Units. During 2021, over 1048 million sq
meters of fabric was produced, out of which 92.5% was cotton and the rest was blended
fabric. In this stage, two or more even-numbered sets of yarn are interlaced on a loom to
create a fabric as weft threads are horizontally woven into vertical warp threads to produce
fabric. During dyeing, color and/or bleaching is done to the yarn, and fabric finishing begins
here. The fabric I then cut, sewn, and assembled into apparel products. The apparel products
are then transported from their assembly location to retail stores where they are then sold to
consumers (INVEST PAKISTAN, 2019).

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Figure 6: : Overview of processes involved in the Textile Industry (Halog &
Abbas, 2021)

Figure 7: Textile Value Chain

New Technologies
Private sector-led economic growth and its sustainability are believed to be reliant on
innovation and competitiveness as the main components. The cotton crop is the main raw
material involved in the industry, and during recent years, multiple climate-smart agricultural
technologies have been implemented in its production to help in protecting its yield against
climate-related disasters. Some technologies include integrated pest management that uses

19
alternative strategies for many pests and diseases rather than chemical pesticides, water-
efficient irrigation systems that apply water directly to the rootzones of plants to prevent
water losses and storing rainwater to eventually use as irrigation (Imran, Ali, Ma, & Culas,
2018).

EFI Reggiani, an Italian company, has been a long-term supplier of equipment to Pakistani
manufacturers, with the first printer installed in 1972. To stay on top of the game, Pakistan
must ensure it has all the latest technology. Reggiani has released new high- production
digital textile printers, and Pakistan currently has three within the country. These printers can
print complex designs up to 90 meters per minute. Two Reggiani HYPER printers were
launched and already sold to Pakistan, and it can produce up to 20 meters per minute and is
available in a 3.4-meter size, making it perfect for producing large-scale items. This
technology is useful as printed lawn designs are extremely popular in Pakistan. Currently,
digital textile printing attributes 10% of the printed fabric market, and that number is
continuing to rise as more technology becomes available (Tex Talks, 2021). Solar Energy
Harvesting tents are another new technology based on European markets being adopted in
Pakistan. The CEO of Mahroz Textile Industry, Muhammad Shahid, has stated that his
company will make joint ventures with a French company to produce tents to protect
agricultural products from weather hazards and to provide a stable supply of energy during
the production process. Currently, Pakistani textile products are sold at a rate from 2-2.5
dollars in Europe, whereas if new techniques were applied the same product could earn up to
8 to 15 dollars (Hussain K. , 2017).

In 2006, the L.E.J Nanotechnology Center was established. Nanotechnology helps the
Pakistani textile industry develops innovative fabrics with unique properties such as stain
resistance by coating the fabric with nano-sized particles to repel liquids, this is convenient
for day-to-day consumers and can be highly lucrative. It can also create UV Protection fabric,
which keeps consumers safe from the adverse impacts of too much direct sunlight. It can also
be used in creating uniforms for various jobs; for example, fire-resistant materials can be
made to help keep firefighters safe (L.E.J. Nanotechnology Center, 2023). 35 to 40 percent of
the cost is due to sewing done by laborers, to combat this automated cutting and sewing
machines have been developed. Machines from Mingyuan Industrial Sewing Application
Center have tested and then set out to Pakistan to help in saving thousands of dollars in
unnecessary expenses an eliminating the need to outsource work (HM HighTex, 2020).

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-Research and Development:

R&D has been crucial to the development of every industry around the globe, but specifically
the activities carried out through research and development aim to manufacture goods and
products in an environmentally friendly and sustainable way. Such activities aid in improving
the products’ efficiency and lifetime. The Pakistan textile industry contributes more than 60%
to the country’s exports, amounting to US $5.2 billion dollars. Even though the industry’s
production amounts to 46% of the total output produced in the country, there is a lack of
R&D and training. Most of the production that is carried out in the region is produced
without the use of a strong engineering base, which keeps the cost of production higher. To
cater to such low engineering skills, improvements have been made. For example, the
development of Task Forces in the military industries and textile engineering is a pathway
toward investors (Kamran Shafiq, 2010).

To improve the performance of the cotton industry through R&D, Pakistan initiated a cotton
biotechnology process during 1992-1993. This initiative was taken with a focus on acquiring
cotton leaf curl virus and improving fiber quality. Several steps have been taken to improve
the yield and quality of this industry such as cloning, breeding programs, utilization of
germplasm resources and molecular-based technologies have been incorporated to increase
the yield and capacity. In fact, Pakistan’s government took the initiative of introducing the
Textile Policy 2020-2025, which aims to promote innovation in the industry and increase
exports. Proper steps such as setting up textile research centers and providing financial
support for R&D projects are being covered under this policy (Dawood, 2020). To improve
the performance of the cotton industry through R&D, Pakistan initiated a cotton
biotechnology process during 1992-1993. This initiative was taken with a focus on acquiring
cotton leaf curl virus and improving fiber quality. Several steps have been taken to improve
the yield and quality of this industry such as cloning, breeding programs, utilization of
germplasm resources and molecular-based technologies have been incorporated to increase
the yield and capacity. In fact, Pakistan’s government took the initiative of introducing the
Textile Policy 2020-2025, which aims to promote innovation in the industry and increase
exports. Proper steps such as setting up textile research centers and providing financial
support for R&D projects are being covered under this policy (Dawood, 2020). Along with

21
this, the TRDP organization (Textile Research and Development Fund) measure was started
to implement R&D activities in the textile industry. This organization focuses on providing
financial aid for R&D projects and training for textile researchers and professionals. The
government has established textile universities to spread awareness of textile education and
research opportunities in the field.

Additionally, to support growth through R&D the government has actively collaborated with
international organizations such as ITMF (International Textile Manufacturers Federation)
and UNIDO (United Nations Industrial Development Organization). These steps are taken to
promote innovation and competitiveness in the textile industry and to constantly incorporate
new research and development in the field (Dawood, 2020).

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Key Firms of Pakistan’s Textile Industry
Several key firms dominate Pakistan's textile landscape, contributing significantly to the
industry's growth and development. These firms vary in size, scope, and specialization, but
collectively they play a crucial role in shaping the textile sector's dynamics. These key firms
exemplify the diversity, innovation, and competitiveness of Pakistan's textile industry.
Through their operations and contributions, they play a crucial role in driving economic
growth, employment generation, and value addition in the country. Here are some of the key
firms in Pakistan’s Textile Industry:

Nishat Mills Limited

Nishat Mills Limited is one of Pakistan's largest vertically integrated textile companies,
founded in 1951. The company operates in various segments, including spinning, weaving,
dyeing, and garment manufacturing. Nishat Mills has a strong presence in both domestic and
international markets, offering a wide range of textile products. With its extensive operations
and export orientation, Nishat Mills significantly contributes to Pakistan's GDP, employment,
and value addition.

Gul Ahmed Textile Mills

Gul Ahmed Textile Mills has been operating since 1953 and has grown into one of Pakistan's
leading textile manufacturers. Known for its innovation and product quality, Gul Ahmed
offers a diverse range of fabrics and garments catering to various consumer segments. The
company has a strong export orientation, contributing significantly to Pakistan's textile
exports and foreign exchange earnings. Gul Ahmed Textile Mills is a major employer in the
industry, providing jobs to thousands of people across its operations.

Lucky Textile Mills

Lucky Textile Mills, founded in 1983, is one of Pakistan's premier textile manufacturers,
specializing in denim production. The company operates state-of-the-art manufacturing
facilities equipped with modern machinery and technology. Lucky Textile Mills places a
strong emphasis on sustainability practices, ensuring responsible production and

23
environmental stewardship. With a focus on quality and innovation, Lucky Textile Mills
exports its denim products to international markets, contributing to Pakistan's textile exports.

Al-Karam Textile Mills

Al-Karam Textile Mills is a renowned textile manufacturer with a history dating back to
1986. The company is known for its design capabilities and diversified product range,
catering to both domestic and international markets. Al-Karam Textile Mills contributes
significantly to Pakistan's GDP through its manufacturing operations and export earnings.
The company continuously invests in technology and innovation to maintain competitiveness
and meet evolving market demands.

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Market Competence:
The textile industry of Pakistan poses significant obstacles to new entrants due to several
factors. Firstly, starting a textile manufacturing operation in Pakistan requires significant
investment in machinery, high-skilled labor, and raw materials. These capital requirements
can be daunting for new entrants, who may struggle to acquire sufficient funding due to
economic instability and a lack of investor confidence in the country. Moreover, the industry
requires specialized expertise to remain competitive, with many firms losing revenue due to
inefficiencies. Regulatory barriers, such as obtaining permits and licenses, can also be
expensive and time-consuming while Pakistan’s complex taxation system can further increase
the costs of starting a new business. Overall, entering the textile industry in Pakistan is a
challenging task that requires significant resources, specialized knowledge, and an
understanding of complex regulatory and tax environments.

Exiting the textile industry can also pose notable challenges for businesses. One of the key
barriers to exiting is the presence of sunk costs, which refer to the investments made by a
business that cannot be recovered if the business decides to leave the industry. As for the
textile industry, sunk costs can include investments in specialized equipment and the cost of
training and retraining skilled workers. If a company has been operating for a long time, it
may have accumulated a significant amount of debt, and the value of its machinery may have
depreciated, making it more difficult to recoup these losses if it decides to exit. Furthermore,
the reliance on exports makes it more difficult for firms to leave the industry, as Pakistan’s
textile industry heavily relies on exports as a source of revenue. This can prove to be
challenging for businesses to exit the industry even if they are experiencing reduced demand
or any other financial crisis (Tufail, 2022).

Market Power:

As a consequence of intense competition, the availability of substitutes, and fluctuating prices

of raw materials, Pakistan's textile industry is elastic. Furthermore, Pakistan’s textile sector is
highly dependent on exports, making it particularly vulnerable to changes in trade regulations
and world demand. The textile industry is generally price-sensitive, as consumers often have
a wide variety of options to choose from, and therefore changes in price and trends can
greatly impact the industry. For instance, if the price of garments increases due to any
external factors, customers will eventually shift away from that specific garment towards a
cheaper alternative, therefore lowering its quantity demanded.

25
In-depth Analysis of the Growth Patterns in Pakistan's Textile
Industry Firm Growth
Over the past few decades, Pakistan's textile sector has been shaped by a mix of economic,
political, and global forces. A 2022 update from Textile Learner highlights that the industry
accounts for roughly 46% of the nation's total output or approximately 8.5% of its GDP as of
2020. In Asia, Pakistan is the eighth largest exporter of textile products providing
employment to 45% of the employer of the country (2020).’ Number of firms, value added,
market expansion and advancements in technology are a few of the key indicators of
Pakistan’s textile firm growth.

Number of Firms

During the 1980s and 1990s, there were fluctuations in the number of firms due to economic
reforms and market liberalization. Government policies encouraging private sector
investment led to a significant increase in the mid-1980s. Thanks to global demand and
export opportunities from the early 2000s, the number of firms grew considerably. However,
the country's internal challenges like political instability and its energy crisis have prevented
growth from reaching its potential.

Technological Advancements

A very important factor driving firm growth has been the use of new technologies and the
modernization of production processes. Companies that have adjusted to this change and
have started modernizing their production have been able to achieve better growth rates as
compared to companies who have yet to adapt to new technology.

Value added
Past Patterns

The value added during the 1970s and 1980s was comparatively low, due to restricted
industrialization and export capacity, with a primary focus on domestic consumption.
Economic reforms and a heightened focus on exports during the 1990s led to a notable surge
in value addition. This trend saw exponential growth from the 2000s onwards, reaching
unprecedented levels due to enhanced trade regulations, heightened global demand, and
investments in infrastructure and technology.

26
Recent Trends

The global reputation of the Pakistani textile industry stems from its unique fabric quality,
designs, and extensive cotton cultivation. Nonetheless, it grapples with issues such as
environmental degradation and resource scarcities, including cotton, energy, and water. These
challenges have ramifications for production, the economy, and employment. To tackle this,
it's important to adopt sustainable methods of production that use resources efficiently and
minimize waste. (Abbas et al., 2021)

These challenges in Pakistan's textile industry can directly impact its value-added.
Environmental degradation and resource shortages can hinder the efficiency of production
processes, leading to decreased value addition. By adopting sustainable production methods
and efficiently utilizing resources, the industry can enhance its value-added capabilities,
contributing positively to economic growth and employment opportunities.

Production Costs
Industries that are more labor intensive than capital intensive may see frequent fluctuations in
cost (specifically labor costs), hindering growth as costs are not predictable. However, some
companies have found ways to save costs by using better technology and organizing their
supply chains better.

Market Demand
For businesses to do well, it is imperative for there to be a decent amount of demand for their
products, especially in places like the US, EU, and China, that have a high consumerism rate.
Being able to sell in these markets is made simpler when there are good trade deals and other
export-friendly regulations by the government.

Export Performance
Since textile companies sell a significant portion of their products internationally, their profits
are heavily impacted by the exchange rates between currencies and the overall state of global
trade. When exchange rates are favorable and there's stability in international trade, these
companies tend to see higher profits.

Graph 1: Distribution of Value Added

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 Figure 8: Distribution of Value Added

Distribution Shape

The graph shows a sharp spike at the lower end, indicating that most companies contribute a
small amount of value, with only a few adding significantly more.

Real-Life Context
SMEs Dominance

Pakistan’s textile sector is mostly made up of small and medium-sized enterprises (SMEs),
which usually add less value due to fewer resources and less advanced technology. According
to an article on ‘Growing Science’ SMEs make up for 90% of Pakistani firms including the
textile industry.

In Pakistan, smaller clothing businesses face significant hurdles that affect their ability to
enhance the value of their products. These businesses lack the financial resources and
infrastructure of larger companies, which limits their capacity to invest in technology and
skilled labor. Consequently, they often focus on basic tasks like manufacturing rather than
more innovative processes.

Moreover, challenges such as energy shortages and compliance regulations further hamper
these businesses' competitiveness. Energy deficits lead to delays and increase operational
costs, while compliance requirements demand additional investments. Additionally, the threat
of terrorism disrupts supply chains and deters potential investors, exacerbating the situation.
‘Findings suggest that the burden of terrorism on the SME is far greater than that of the

28
energy crisis’, writes Mahwish J. Khan in her article highlighting the challenges faced by
SMEs in the apparel sector.

As a result, most value-added activities in the clothing industry remain concentrated in larger
enterprises. To address this imbalance, experts recommend policy reforms and infrastructure
improvements. Initiatives like the China-Pakistan Economic Corridor offer potential avenues
for growth and development for smaller businesses, providing them with the opportunity to
ascend the value chain.

 Top Performers: A small number of large firms, like Nishat Mills, Gul Ahmed,
and Sapphire, provide a large share of the industry's value because of their
better technology and higher efficiency.
 Policy Impacts: Government policies, such as subsidized energy rates and
export incentives, often benefit these larger firms that can invest more in
adding value.

Graph 2: Distribution of Number of Employees

Figure 9: Distribution of Number of Employees

Distribution Shape

The graph highlights that most companies have around 200,000 employees, with only a small
number of firms having more employees. So, the probability of a firm having 200,000
employees is greater than a firm having a greater number of employees.

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Real-Life Context
Manual Labor Reliance
In the textile sector, human hands prevail over machines. This preference means most firms
have substantial staff numbers, though only a select few boast exceptionally large
workforces.

Workforce Expansion
In the past half-decade, the industry has ramped up recruitment efforts to keep up with
heightened local and international demand. This increase is noticeable in the wider range of
employee numbers.

Automation Trend
Big companies are starting to bring in more automated systems. While this change might put
a brake on hiring new workers, it ends up making things more efficient and valuable in how
things get made.

Graph 3: Distribution of Employee Growth Rates

Figure 10: Laplace Distribution of Employee Growth Rates

Distribution Shape
The graph peaks around zero growth, showing that many firms have stable or slightly
positive employee growth rates, with noticeable peaks at both positive and negative growth
rates. This is not ideal as this shows zero growth in Pakistan’s textile industry. Additionally,

30
this graph is negatively skewed showing that there is a higher probability of a firm having a
slower growth rate than a firm having a higher growth rate.

Real-Life Context
Economic Fluctuations
Despite economic challenges, employment stability is evident around zero growth; even
though there is no growth, at least firms are not moving towards negative growth. However,
significant instances of both positive and negative growth rates are present.
COVID-19 Impact
The pandemic caused many companies to experience negative growth due to lockdowns,
reduced demand, and supply chain disruptions. After the pandemic, some firms saw positive
growth as demand recovered.
Export Demand
Global demand fluctuations, especially from major markets like the US and EU, have
influenced employment growth rates. Favorable export conditions and trade agreements have
led to positive growth periods.

General Trends and Real-Life Incidents

Government Efforts
Measures like tax refunds for exporters, subsidies on energy, and the Textile Policy 2020-25
have uplifted the industry by boosting exports and encouraging modernization.

Changes in Worldwide Trade

Transformations in global trade, such as the trade tensions between the US and China, have
created chances for Pakistani textile exporters.

Technological Advancements
Larger firms that have invested in modern machinery and technology have enhanced their
efficiency and productivity, influencing employment and value-added processes.

Sustainability Trends
The global emphasis on sustainability has prompted Pakistani textile companies to adopt eco-
friendly practices, impacting their production methods, value addition, and employment.

31
SWOT Analysis
The textile industry in Pakistan is a significant portion of the nation's economy, contributing
heavily to GDP, employment, and exports. Known for its extensive production of cotton and
cotton-based textiles, the industry has a rich history. However, it faces many challenges and
opportunities in a constantly evolving global market. This SWOT analysis aims to provide a
detailed evaluation of the strengths, weaknesses, opportunities, and threats facing Pakistan's
textile sector, offering insights into its current state and future potential.

Strengths
1. Sufficient Raw Materials:

Pakistan is highly self-sufficient in raw materials. According to Cotton Incorporated, Pakistan

has rank 13th among the world's leading cotton exporters and it holds the 4th position as one
of the largest cotton producers globally. Cotton is Pakistan's primary crop, and the textile
industry heavily relies on it. To capitalize on its abundant cotton resources, Pakistan’s textile
sector has progressively industrialized.

2. Low-cost Labor:

One of the primary strengths of Pakistan's economy is the availability of cheap labor, with the
textile industry employing approximately 40% of the industrial labor force. This cost
advantage increases the textile sector's competitiveness and attracts a higher volume of orders
from the USA and European markets.

3. Export Oriented Industry Structure:

In 2016, Pakistan's textile and clothing industry had approximately 62% of the country's total
exports. Moreover, Pakistan had a 2.7% share in global textile exports, making it the 7th
largest textile exporter globally. This strong focus on exports boosts the overall stability of
the textile industry.

4. Contribution to GDP and Economy:

The textile industry is a major pillar of Pakistan's economy, contributing approximately 8.5%
to the GDP and employing around 40% of the industrial labor force, making it the largest
employer in the manufacturing sector. Its impact goes beyond economic figures, improving

32
socio-economic stability, rural development, and global trade opportunities. Through its
export-driven nature, the industry plays a main role in increasing economic growth, creating
livelihoods, and enhancing Pakistan's position in the international market.

Weaknesses
1. High Reliance on Cotton:

Pakistan's textile industry heavily depends on cotton and its production. Hence, the industry
faces problems when cotton production reduces. Pakistan mainly imports man-made
filaments and staples (fibers, yarns, and fabrics). It means that it imports synthetic fibers,
yarns, and fabrics, which are heavily used in clothing and technical textile production. This
reliance on cotton negatively affects the diversification of Pakistan's textile exports. Every
year, Pakistan must spend millions of dollars on just importing synthetic fibers.

2. Insufficient Research & Development:

In Pakistan's textile and clothing sector, there is an evident lack of effective research,
development, and training. This insufficient emphasis on research and development within
the cotton sector has led to lower quality cotton compared to other regions in Asia. Therefore,
due to the reduced profitability of cotton crops, farmers are moving towards alternative crops
like sugarcane. The absence of adequate research and development initiatives is the root
cause of this situation, which is depriving Pakistan of huge profit potential.

3. Limited Labor Productivity:

The lack of qualified, skilled, and educated labor force poses a significant barrier on
Pakistan's textile and clothing exports. Even though Pakistan is abundant in labor, its labor
productivity falls evidently lower than that of its competitors due to the presence of
unqualified and unskilled workers. Enhancing labor productivity requires effective training
and education initiatives. By doing so, the unnecessary consumption of raw materials can be
minimized, while also improving product quality which will give Pakistan textile industry an
edge.

4. Infrastructure challenges:

Adequate infrastructure includes multiple factors like sufficient water resources,

uninterrupted electricity and gas supplies, efficient supply chain and transportation, effective

33
tax structures, and availability and access to raw materials. However, Pakistan faces a
shortfall in terms of sufficient infrastructure. Currently, the textile industry in Pakistan is
facing challenges with ever rising electricity and gas prices, which directly impact production
costs. Additionally, the textile industry suffers from outdated equipment and machinery. The
inability to modernize this equipment and machinery has resulted in a fall in Pakistan’s textile
competitiveness. Obsolete technology contributes to higher production costs in Pakistan
compared to other countries such as India, Bangladesh, and China

5. Quality Standards:

The Pakistan textile industry currently faces many challenges, notably the point to enhance
the quality of its products. While some large-scale Pakistani textile companies follow quality
standards, many small and medium-sized enterprises ignore this aspect. A major part of these
smaller companies chooses to buy second-hand textile machines from China, India, and
South Korea, prioritizing affordability over quality. Thus, these older machines often fail to
meet quality standards, resulting in textile products of inferior quality. This situation leads to
the loss of international customers and market share. Over the last 5 years, Pakistan has faced
a trade deficit in textile machinery. Imports of textile and leather machinery have increased
by approximately 22%, showing the sector's dependency on imported machinery from
countries like Japan, China, and Belgium etc.

Opportunities
1. Rising Domestic Demand:

As Pakistan's population and the economy is growing, so it the textile industry. As the
economy grows, domestic consumption of textiles and clothing increases, led by a rising
middle class and improving living standards. The expanding domestic market provides a
stable base for the industry, reducing reliance solely on exports. This internal demand
supports a growing textile sector, encouraging local production and fostering innovation.

2. Regional cooperation:

The recent expansion of the Shanghai Cooperation Organization in June 2017 presents a
significant opportunity for Pakistan's textile and clothing industry. With the addition of new
members, the organization now represents a substantial portion of the global population and
holds significant economic influence. This regional cooperation opens doors for enhanced

34
trade relations, market access, and collaboration within the textile sector, allowing Pakistan to
tap into new markets and strengthen its position in the global textile industry

3. International Collaboration:

International marketing and collaboration involve the strategic presentation of products and
services to customers, aiming to establish strong relationships and capitalize on opportunities.
By investing in marketing techniques and skilled personnel, Pakistan can effectively increase
its share in the global textile and clothing trade. To achieve this, Pakistani textile companies
should focus on reducing production costs, enhancing labor efficiency, adhering to quality
standards, developing high-value products, and leveraging successful marketing strategies to
access foreign markets. Collaboration with established foreign entities presents an
opportunity for learning and growth, as companies can use valuable insights from partners,
whether they be suppliers, competitors, or collaborators.

4. Diversifying Product Portfolio:

Pakistani textile and clothing companies should focus on diversifying their product offerings
to compete effectively with rivals and expand their market share. Rather than solely relying
on raw cotton, prioritizing clothing production can yield higher profits. Additionally, there is
a growing demand for technical textiles, yet this segment has been largely overlooked by both
the government and textile companies in Pakistan. By shifting attention to technical textile
production, Pakistan can reduce its dependency on imports and capitalize on the burgeoning
market for aerospace, military, marine, and medical products.

Threats
1. Energy Shortage:

Pakistan struggles with higher electricity prices compared to its competitors like Bangladesh
etc, leading to increased production costs. Currently, Pakistan is amid a severe energy crisis,
arguably one of the worst since its creation in 1947. The shortfall in electricity, natural gas,
and petroleum products has impacted the daily lives of Pakistani citizens. The scarcity of
energy resources has triggered a decline in industrial and agricultural growth, giving rise to
numerous socio-economic issues such as inflation, unemployment, civil unrest, frequent
strikes, street crimes, societal intolerance, and heightened poverty levels.

35
 2. Political Instabilities:

Political instability and corruption in Pakistan significantly hinder industrial productivity.

Frequent changes in policies disrupt business operations, while the atmosphere of unrest
impedes industrial activities. For example, abrupt changes in trade regulations can halt
production lines. All this adversely affects the confidence of investors too and hence, the
textile industry struggles to develop without long-term, consistent policies.

3. Competiton:

The global textile industry is fiercely competitive, posing a significant threat to Pakistan's
textile sector. Major competitors like China, India, and Bangladesh benefit from advanced
technology, efficient supply chains, and government support. China leads with large-scale
production and subsidies, India excels with a vast raw material base and skilled labor, while
Bangladesh thrives in ready-made garments with low labor costs and preferential trade
agreements. Pakistan struggles with higher production costs due to energy prices, outdated
machinery, inconsistent quality standards, limited marketing strategies, and trade barriers. To
remain competitive, Pakistan's textile industry must modernize infrastructure, enhance
quality, invest in technology, and develop robust marketing strategies

4.

36
Solutions and Recommendations
Investing in Research & Development:
Pakistan is likely to heavily benefit its position in international markets by investing in R&D
to stay ahead of world trends. Newer farming methods can particularly improve efficiency in
Pakistan’s cotton industry that is already known for its export products. Newer production
techniques can also benefit the garment sector by allowing it to diversify towards higher
value-added products. (Memon et al., 2020)

Provision of Government Subsidies

The high manufacturing costs, primarily being driven by high raw material costs, are a
recurring problem faced by the textile sector. Subsidies are often used as industrial policy
instruments by the government, with export subsidies being the most prevalent (Ghafoor &
Iqbal, n.d.). Reduced levies and duties on materials can assist in reducing production
expenses. Moreover, surplus funds because of saved payments could in turn be invested into
infrastructure and development. These funds would also allow firms to expand their
operations, and ultimately enhance their competitiveness in global markets.

Improving Energy Infrastructure

Pakistan’s energy crisis significantly contributes to the high-cost factors in the textile
industry. Although the textile sector is not typically considered energy-intensive, it includes
numerous plants that collectively consume a substantial amount of energy. Energy use is
particularly required in the spinning process, weaving process, and wet-processing in
composite textile plants, all of which provide energy efficiency improvement opportunities
through the use of technology.

Measures to improve efficiency of the spinning process includes optimization of the

preparatory process, altering the ring frames used in spindle making, installation of efficient
humidification systems to reduce energy losses. Wet-processing can also be made more
efficient through alterations in the preparatory process, for example, the installation of heat
recovery equipment in continuous washing machines can greatly reduce energy consumption.
Weaving looms, that account for about 50-60% of a traditional energy plant’s consumption,
can be made more efficient in their energy use per unit through the modification of auxiliary
utilities such as the humidification processes, compressor systems and lighting. (Hasanbeigi
& Price, 2012)

37
Pakistan’s Trade Policy and Agreements
Pakistan’s trade policy, though acknowledged as an acceptable paper, in practice fails to
address its trade deficit crisis and stimulate high export levels. To make any valuable
improvements, the policy must incorporate actionable strategies, like eliminating trade
barriers, creating export incentives, and investing in infrastructure and technology to increase
competitiveness of its textile sector (Memon et al., 2020).

Pakistan can also take advantage of its favorable relations with China and add terms to the
pre-existing CPEC Agreement for the advancement of textile technology. China’s expertise in
the garment sector could increase the potential of textile commodities in Pakistan,
particularly in segments like weaving and apparel. CPEC has already proven to be ideal
solution in ridding Pakistan of its energy crisis, increasing efficiency of the textile sector
while adding an estimated 2% to growth in Pakistan’s GDP. (Abid & Ashfaq, 2015)

38
Conclusion
Pakistan's textile sector is a major economic pillar that generates most of the country's GDP,
employment opportunities, and export revenue. Thanks to Pakistan's deeply rooted historical
legacy in cotton and textile production, the country has been able to make a name for itself in
the international textiles market. However, it stands that the textiles market has little room for
technological improvement and so Pakistan's major export revenue generating sector not only
fails to help the country grow but also fails to attract any FDI (Foreign Direct Investment). As
we have seen throughout the report, the industry still has a lot of problems that need to be
addressed in order to maintain competitiveness and sustainable growth in the constantly
changing global market.
The textile sector grapples with various hurdles like depending too much on cotton, lack of
effective research and development initiatives, sluggish labor productivity, inadequate
infrastructure, and issues with maintaining quality standards. These challenges have
prevented the industry from reaching its maximum potential. Lack of regulations and
awareness also means that most firms are unaware that one of the major reasons Pakistani
textiles do not perform well in the international market is the fact the products are not 'green'
enough (as in they are not sustainable). Additionally, political unrest and the long ongoing
energy crisis further restrict business growth and investment opportunities.
However, the industry's easy access of raw materials, especially cotton, is a clear benefit,
though not to a great extent. Pakistan is one of the world's leading producers and exporters of
cotton, which provides a strong basis for its textile industry. The industry has made use of this
resource over time, progressively developing into a more industrialised and export-oriented
sector.
In order to take advantage of these prospects and tackle current issues, coordinated
endeavours and calculated actions are essential. Important moves forward include funding
R&D to stay current with global trends, offering government subsidies to reduce
manufacturing costs, enhancing energy infrastructure for increased efficiency, and utilising
trade agreements and regulations to boost competitiveness. Working together with foreign
partners can help progress technology and open up new markets. One such partnership is the
China-Pakistan Economic Corridor.
In conclusion, Pakistan's textile industry shows promise but also faces significant challenges.
Overcoming these obstacles will require proactive problem-solving and collaboration. By
tackling its shortcomings, seizing opportunities, and minimizing risks, the textile industry in

39
Pakistan can pave the way for sustainable growth, which would have a positive impact on the
nation's economy and employment landscape. With a focus on innovation, creativity, and
teamwork, Pakistan's textile sector holds the potential to flourish and leave a lasting
impression on the global market.
However, as a country almost 77 years old, Pakistan should have long since left the
agricultural/textile sector behind and moved into the manufacturing sector and then the
services sector. Today, Pakistan's services sector thrives (mostly in the international market)
while its agricultural sector fights every day to keep the country afloat and the manufacturing
sector is next to non-existent. Paired with the fact that a majority of Pakistan's exports
(textile) consist of low value added goods, it looks like Pakistan has a long way to go before
it is able to compete with the likes of India and Bangladesh.

40
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Hasanbeigi, A., & Price, L. (2012). A review of energy use and energy efficiency

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Iqbal, M. S., Shaikh, F. M., Mahmood, D. B., & Shafiq, K. (2010). Development of textile

industrial clusters in Pakistan. Asian Social Science, 6(11), 123–140.

Khan, A. A., & Khan, M. (2010). Pakistan textile industry facing new challenges. Research

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Memon, J. A., Aziz, A., & Qayyum, M. (2020). The rise and fall of Pakistan’s textile

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