Pakistan’s textile industry has been facing issues since years. It is going through the toughest period in decades due to multiple reasons.
Some attribute the sector’s decline to the global recession while some link it with the government policies. There is not a single cause of concern for the sector as it has been facing the issues like hike in electricity tariff, increasing cost of inputs and increase in the interest rate. These are the few factors that have affected the sector very badly.
The successive governments’ efforts seemed to have overcome the energy crisis to some extent but the high cost of production resulting from rise in electricity tariff has been the primary concern for the industry.
The textile industry is the backbone of the economy of Pakistan as it contributes more than 60 percent to the country’s total exports. However, currently this industry is facing great decline in its growth rate. The reasons are quite obvious.
The Coronavirus outbreak in China has created an opportunity for the local textile industry to operate to its full capacity and grab the vacuum but Pakistan’s textile industry seems to have been struggling in the wake of higher power tariff.
According to the media reports, India’s textile industry is all set to capture 20bn dollars market opportunity created by the shutdown in China. On the other hand, Bangladesh and Vietnam are also gearing up to ensure their share, but Pakistan’s textile industry is struggling for the implementation of all-inclusive electricity tariff of 7.5 cents per unit.
On the other hand, the Power Division has included more surcharges in the bills owing to which power tariff for export industry has gone to 13 cents per unit. The situation will not only make Pakistan’s textile products in international market non-competitive, but also put the industry in a position where it wouldn’t be able to grab the opportunity created in world market because of China shutdown.
Continuing rise in the tariff can, on one hand, halt growth in the textile sector, it may also trigger massive unemployment in the country and what to talk about grabbing the opportunity.
The All Pakistan Textile Mills Association blames the government for the continuing crisis. In a recent letter by Executive Director All Pakistan Textile Mills Association (APTMA) Shahid Sattar to Abdul Razak Dawood, Adviser to Prime Minister on Commerce, Textile, Industries and Production and Investment, he has expressed concerns on part of the Association that golden opportunity to increase export market share was being squandered by the government by hiking power tariff.
It’s high time for the government to facilitate the sector so that it could revive and grab its due share in the international market. The areas where the government needs to focus include overcoming energy crisis, gas load shedding, and the most important decrease the input cost by reducing the power tariff.
Also Read: Striving for export-led growth
