Textile & Fashion

Export-led Trade Policies Predict Growth in the Textile sector


The new government’s export-led policies are aimed at promotion and uplifting of the biggest industrial sector of Pakistan. As the 4th largest cotton producer in the world, Pakistan has huge potential for success as the locally available raw material is of huge advantage. After comprehensive study of the global trade environment and of sector strengths and weaknesses, the second Textile Policy (2014-2019) addressed issues of all sub-sectors. To deal with the grim economic crisis that the country is currently facing with enormous balance of payment deficit and low competitiveness in comparison to its trading partners, the need of the hour policies to expand export is introduced.

According to analysts, the rupee devaluation after three years of fixed exchange rate against the US Dollar is supposed to restore lost competency of the sector of textile. For five Punjab based export-oriented sectors, including textile, energy tariff is reduced which will be beneficial in competing with other regional countries. Other than reducing energy tariffs, the new government in order to increase exports has been providing incentives like drawback duties and cheaper financing under long term financing facility and export refinance facility.

The phase II of Free Trade Agreement is currently in negotiation with China which will be a breakthrough on its success as it will lower the tariff on exports. The US-China trade war has intensified over the last year as the imports from China were down to 30% in the US. This is seen as an opportunity for countries like Pakistan, Bangladesh, India and Vietnam as they can expand and explore the trade potentials of the US market.

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