Pakistan faces challenges to maintain textile market share

Pakistan would have to struggle hard to maintain its market share with the end of China specific safeguards by US and EU in 2008. During January-May 2007, it was only quota-restricted categories which recorded 5.2% growth as the exports of non-restricted categories declined by 5.7%. Importantly, the growth in Pakistan's exports of high value added apparel to US market is vulnerable to the removal of China specific safeguards measures, as the share of restricted exports in Pakistan's total apparel exports to US markets is more than 80%.

The major categories, which are dependent on the US-China quota, include cotton trousers and cotton knit shirts. The accession of Vietnam in World Trade Organization (WTO) with effect from January 2007 and the subsequent removal of US textile and clothing imports limits from the country has also affected Pakistan's textile exports adversely. The above analysis suggests that giving boost to exports in FY08 would be a challenging task for Pakistan.

The anticipated increase in the cotton prices (main input for textile industry) and abolition of China specific textile and clothing safeguards in 2008 by US and EU, are likely to add to the difficulties of the textile industry in the near future.