High hopes from the Textile Policy of the new PTI Government
The newly elected government of PTI has promised the textile
sector a number of measures to increase its viability through
the Textile Policy 2018-23, which was announced in January 2018.
With the arrival of a new government, it is time to evaluate the
salient features of the policy. According to the policy, the
cost of production would be reduced by decreasing energy costs
and making the input costs affordable. It is commendable that
the current textile relief package announced by the previous PML
government are to be unconditionally extended for five years.
This will ensure the stability and continuity necessary for the
solvency of the industry. PTI’s textile policy ensures the
immediate release of all refunds due to the textile industry.
This is a much needed and welcome measure. However, previous
governments had also promised to release these funds but were
unable to follow through due to financial constraints. It is
hoped that the PTI government will be able to find the means to
achieve the release of these refunds stuck in the process for a
The new textile policy also commits to the steps for making
the export-oriented sector 100 % zero-rated. There will be a
significant focus on increasing the product mix, from basic
products to high-value addition. A mention is also made of
ensuring the continuity of the hard-earned GSP Plus status.
Strict adherence to social compliance laws is mandated to retain
this much coveted status vital for the growth of the value-added
sector by providing a much needed competitive advantage.
Our cotton sector is in need of assistance and development to
increase yield and viability. Research and development for
introducing genetically modified seeds, organic cotton has also
been prioritised in the new textile policy. This is a
previously neglected sector and the cost to our textile industry
has been high due to the non-availability and shortage of the
basic raw material for the industry.
An important part of the policy is the encouragement of
internationally accredited laboratories to bring their testing
facilities to Pakistan. The existing organisations who are
working in this field such as SGS Pakistan and TTI are good
examples of the work already being done in Pakistan.
Furthermore, close co-operation with such organisations plays a
significant role in bringing up the quality of textile products
to the highest levels of value addition.
According to the new policy framework, the new government
will also facilitate the manufacturing of textile machinery and
the required inputs, such as plastic, polyethene, paper, etc.,
to the extent possible in Pakistan. It is to be noted that the
manufacture of machinery has not been encouraged even after over
seven decades. The imported textile machinery and technology
has been responsible for the strong base of the textile industry
of Pakistan. However, many local manufacturers of textile
machinery are present in Pakistan, such as Standard Engineering
and Nazer Industries, who are producing machines and parts
according to the international specifications and standards.
There are many more manufacturers in the unorganized sector,
based mainly in the province of Punjab. These manufacturers of
shuttle-looms, hydro extractors and other basic textile
equipment need the attention of the Government to bring their
manufacturing at par with international standards. They need
guidance and support through organisations such as the
Engineering Development Board and other government organisations
that can help establish a strong base of textile machinery
manufacture in Pakistan. One of the main hurdles faced by the
manufacturers of machines in Pakistan is the anomaly in the cost
of imported components and the completely built imported
machinery. Cost of production of local machinery is much higher
due to the higher cost of imported components and raw materials,
as well as the higher costs of energy and labour. Pakistani
manufacturers are also comparatively less competitive than
foreign machinery manufacturers, as they do not have the
advantages of the economies of scale that the latter does.
Other important elements of the new PTI policy include the
improvement of international marketing efforts of the export
sector, the development of the existing industrial zones to
achieve higher productivity, and an investment in human
resources through training courses aimed at meeting the needs of
the industry. It is crucial that the new PTI government ensures
successful implementation of the textile policy in order to
establish a positive framework of growth and prosperity for the
textile industry, which is the backbone of the economy of