In the WTO post-quota regime, it was expected that once quota restrictions were abolished, Pakistani textile exports would significantly increase. Textile industry invested more than $6 billion under BMR to meet the challenges of quota-free competition, which is much lower than that of other developing countries of the region despite its great potential.

The export of textile products has increased by 5% during the financial year 2006-07 to $10.8 billion against $10.2 billion in the previous year. However, it fell short of its full-year target of $11.5 billion.

The present decline in textile is mainly due to the increasing cost of doing business in Pakistan, the higher mark-up rates, non-availability of technical staff and higher production costs.

Bangladesh produces only 3% of cotton for its industry but its garments  exports hit over US$ 12 billion last fiscal year (2006-07) with around 75% of the earnings coming from the readymade garment sector, while Pakistan's textile industry meets 90% of its requirements from locally produced cotton, ironically its garments export is around $1.38 billion.

Pakistan textile sector is by far the most important sector of the economy contributing 67% to export earnings and engaging 35% of labour force. The value addition in the sector accounts for over 9% of GDP and its weigh age in the quantum index of large-scale manufacturing is estimated at one-fifth.

The post quota scenario under the WTO regime has dramatically changed the global trade partners and only a small number of Pakistani companies match international levels for quality and competitiveness.

Pakistan's textile industry could not exploit its potential in the free market post-WTO regime because of shortage of trained manpower, less investment in human resource management, in innovative products and in value-addition in the garment industry.

On the other hand methods of picking of raw cotton and ginning are primitive which cause damage to the fiber. The ginning industry with 1,221 units has mushroomed in the cotton growing areas informally without adequate regulations. Garment industry is now employing Sri Lankan production managers and quality controllers in their units to remain competitive. There are not many textile training institutes of international standards in Pakistan to train the manpower in art Silk, synthetic weaving, garment, hosiery, towel, apparel, ready made garments etc. Textile industry could not make substantial progress without a solid framework of up-to-date knowledge and technology and value addition improvements which are lacking in Pakistan. Textile sector does not have the culture of investing in human resource.

Sufferings of Pakistani textile exporters would increase further as the US has given free market access (FTA) to Morocco, Jordan, Kenya and Bahrain. America is allowing us Special Opportunity Zones (SOZs) which will allow duty-free export of goods to US market of the goods manufactured in those Special Opportunity Zones. Now United States plans to impose ceiling on certain textile products from Pakistan to protect its own industry in the proposed Reconstruction Opportunity Zones (ROZs) being established in border areas with Afghanistan.

This restriction will be on the pattern of China from where the US has allowed partial import of cotton, wool, man-made fibre, silk blend and other vegetable fibre textiles and textile products in agreed categories.

Ministry of Textile Industry has now decided to develop perspective textile and clothing industry plan 2007-2015, to regain the sector’s lost share in the world market.  The perspective plan would consist of two phases, Phase-I would cover period of 2007-2011 to meet the challenges of short and medium term and phase-II would be 2011 to 2015 for realising the medium and long term objectives.