Pakistan is one of the largest cotton-manufacturing countries of the world. Textile sector occupies the biggest number of the human resource. The industry gives more than 60 % to the country’s entirety exports and adds around 46 %t to the total production i.e. 8.5%of the country GDP. Pakistan is the 8th largest exporter of textile products, catering for 38% service in Asia. Presently, main losses are being acquired by this industry with foreclosure threatening around. The reasons of this turning down are mainly added by the high cost of production because of growing in the energy costs. Cost of import has increased due to a declining Rupee. Increase in inflation rate and high cost of investing has also outcome critically the growth in the textile industry.
A top textile exporter said that the Ministry of Textile issued three notices to make easy the industry in the history. Textile producers will get 3% drawback on garments, 2% on home textile and 1% on fabrics. The government has yet to issue any notices in the addition for these services.
Another remarkable aim is the ratio of raw material price and conversion cost in product as today raw material price builds for approximately 90% of the total cost of the manufactured goods, as matched up to 60% a year back”. Lack of Research & Development (R&D) in Cotton Sector made result in low down quality of cotton as compared to rest of Asia. Lack of new Equipment It is disagreed that the textile industry has wasted equipment and machinery.
The cost of manufacturing has also increased because of instant growing in electricity tariff. Some textile owner employs another source of energy like generator or ups which boost their cost of production further. Such issues have reduced competitiveness of this business in market. The industry had gradually modified to the deficit of electricity in the country by setting up of power plants running on natural gas.