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Wednesday, September 1, 2010

Growth of Textile Industry in Pakistan

Trade has always been an essential part of the human existence. Ever since time immemorial, with the start of communication; men and women of different color, creed and ethnicity have indulged themselves in the economics of the world and have earned their livelihood from it. Be it the barter system, the Silk Route or even the Great Depression, our existence has been linked with trade. In short this act of voluntary exchange of goods and services has been going on for centuries.

The commerce of fabric is no stranger to the Indian subcontinent. Ever since partition, officials have sought a higher rate of economic growth in order to lift the population out of poverty. Rapid industrialization was viewed as a basic necessity and as a vehicle for economic growth. For more than two decades, economic expansion was substantial and the-growth of industrial output was striking. Recent years have seen a drastic change/in the industry; especially the textile sector. At the time of independence, present-day Pakistan had only two textile mills. These units were self contained, having all the departments such as ginning, spinning, weaving, dyeing and bleaching as well as processing and printing. Although the printing of textiles was not as developed in those days as it is now, after independence, the process of developing the textile industry started to pick up gradually. By mid-sixties there were about 180 units of textile bleaching, printing and processing units, mostly situated in Karachi and a small number in the Punjab. In 1968, in consequence of change in the basis of collection of excise duty from capacity to production, most of the mills closed down their weaving sections. The looms which were removed from the mills, were installed outside the mills' premises in units of four, which have been exempted from excise duty.

About 31, 000 looms since 1969-70, continued to operate in the mill sector even after a general segregation of weaving. This number decreased to only 9,000 looms in the mill sector by the end of June, 2006. In the non-mill sector, a big majority of the units operate at a very low level, having little automatic machinery. In some factories, the printing of textile, is done by spreading the cloth on the top of tables, while pressing design screens on them - a method which is primitive as compared to the process in use by modern and automated factories. According to estimates, textile finishing industry consists of nearly 731 units, the majority of which are independent and complementary to the weaving industry. About 650 independent processing units are working in and around Faisalabad, Gujranwala and Karachi, in which about 50 integrated units have complete finishing facilities.

Textiles and clothing trade is a vital part of the world economy with many nations heavily dependent on this sector for foreign exchange earnings and employment generation. Today, textiles and clothing trade accounts for nearly 6% of total world exports. Many of the least developed-and small developing countries have built a huge dependency on the sector which often accounts for more than 90% of industrial exports and more than 50% of total employment. With increased global competition, many sectors within the textile industry are increasing production efficiency. Research, innovations and development in technical textiles, yarn quality, clothing products, process performance, fabric finishing, coloration technology and marketing can bring significant advancements in the textile sector in order to develop market supremacy. :.

Fabric processing is the most critical stage of value addition in the entire value chain. Woven or knit fabric can either be dyed or printed, depending upon the requirement of the customer who is the garment manufacturer. The use of colored cotton being unique and attractive has the potential to become a part of cotton fabric and apparel market.

After the abolition of quota regime, Asia has become a hub of textile trade as one of the major exporting countries of the region. Instead of importing yarn from Pakistan as the developed nations did, Asian countries have invested heavily in their spinning industries to produce yarn. Pakistani spinners were caught on the wrong foot as they invested heavily in spinning during the last eight years while their market in countries like Japan, the US, European Union and Hong Kong weakened after the textile trade was made quota-free at the start of 2005.

According to recent figures, the Pakistan's textile industry contributes more than 60% to the country's total exports, which amounts to around US $ 5.2 billion. The industry contributes around 46% to the total output produced and exported by Pakistan. The contribution of this industry to the total GDP is 8.5%. It provides employment to 38% of the work force in the country, which amounts to 15 million people.