ISLAMABAD: Pakistan’s textile exports are expected to hit new heights after orders from regional competitors, Indian and Bangladesh, are being diverted to the country owing to the COVID pandemic and facilitation provided to the sector from the incumbent government.
This was the crux of a Bloomberg report which quoted Adviser to Prime Minister on Commerce Abdul Razak Dawood as saying that textile exports are expected to increase by 40% from a year ago to a record $21 billion in the fiscal year ending in June.
One of the few economic positive spots in the country is the textile industry, which supplies everything from denim pants to towels to buyers in the United States and Europe, said the report.
When the pandemic first erupted in 2020, Pakistan allowed its factories to open ahead of India and Bangladesh, attracting orders from global brands such as Target Corp. and Hanesbrands Inc. Textiles account for roughly 60% of Pakistan’s total exports, and the country allowed its factories to open ahead of India and Bangladesh.
“A lot of orders actually were shifted from Bangladesh and
India to Pakistan” during the pandemic, said Dawood in an interview at his Islamabad office. “The other good thing that’s happening is we are now becoming competitive with Bangladesh. Three, four years ago, Bangladesh was really beating us.”Read More: PM KHAN APPRISED OF PROGRESS ON NEW TEXTILE POLICY
According to Dawood, the government aims to release a plan next month that will likely include incentives for exporting to new markets such as Africa, South America, and Central Asia. The country is doubling down on steps to increase textile exports, including tax advantages, low-cost loans, and power at comparable prices to rivals in South Asia. The local currency’s 60 % depreciation against the dollar since 2018 has also helped, the report stated.
“Pakistan’s exports have become competitive over the past few years,” stated Ahfaz Mustafa, CEO of Ismail Iqbal Securities Pvt. while speaking to Bloomberg. “There is a fixed energy tariff regime that keeps in mind regional prices, the government is much quicker to refund the money it owes exporters, and there has been a giant currency devaluation,” he said.
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