Textile Industry

TEXTILE SECTOR OF PAKISTAN
Analysis by Projects & Policy Research Department | PBIT | Aug 2018
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1
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Contents
Page Number
 Pakistan Textile Industry at a Glance

Economic Overview…………………………………………………………………………………………………………………….………………………………. 4
Brief Socio-Economic profile of Pakistan……………………………………………………………………………………….…………….…….5
Manufacturing Sector overview………………………………………………………………………………….…….…………………………………….6
Textile Value Chain……………………………………………………………………………………………………….……………….……………………………..7
Pakistan Cotton Textile Statistics……………………………………………………………………………………………………….………………….8
Major Textile Players……………………………………………………………………………………………………….……………….…………………………9
Over View of Pakistan Exports……………………………………………………………………………………………………………….……….……..10
Pakistan Textile Exports Executive summary…………………………………………………………………………………………………..11
Export Vs Import Analysis…………………………………………………………………………………………………….………………………………….12
 Pakistan Cotton Industry

Cotton statistics……………………………………………………………………………………..……………………………………………………………………15
Cotton Balance Sheet Pakistan…………………………………………………………………………………………………………………………..…18
 Global Cotton Statistics Comparison

Global Cotton Production……………………………………………………………………………………………………………………………………..…20
Global cotton Consumption………………………………………………………………………….…………………………………………………………21
Global Cotton Imports………………………………………………………………………….…………………………………………………………………..22
Global Cotton Exports………………………………………………………………………….………………………………………………………………..…23
Global Cotton Inventory…………………………………………………………………………………………….………………………………………….…24
 Pakistan Cotton Textile Trade Statistics

HS-63 Country Wise Analysis ……………………………………………………………………………………………………………………………26
HS-63 Product Wise Analysis ……………………………………………………………………………………………………………………………27
HS-52 Product wise Analysis ……………………………………………………………………………………………………………………………29
HS-61 Product Wise Analysis ……………………………………………………………………………………………………………………………..31
HS-62 Country Wise Analysis ……………………………………………………………………………………………………………………………..32
HS-62 Product Wise Analysis ……………………………………………………………………………………………………………………………..33
 SWOT Analysis ……………………………………………………………………………………………………….............................35

 Techniques To Increase the Textile Industry ………………………………………………………………………..……38
 EU GSP Plus Scheme………………………………………………………………………………………………………………………………………40
 Fashion Ware
New-Era in Ready-Made Market of Pakistan ………………………………………………………………………………….42
Local Ready Made Market ………………………………………………………………………………………………………………………44
Global Ready-Made Market of Pakistan ……………………………………………………………………………………………45
 SWOT Analysis
 Techniques To Increase the Textile Industry Growth
 EU GSP Plus Scheme
 Fashion Ware
2018 Punjab Board of Investment and Trade I Transaction Department. All rights reserved
Economic Overview
Pakistan economy is the 25th largest in the world in terms Pakistan is currently undergoing a process of economic
of purchasing power parity (PPP), and 42nd largest in terms of liberalization, including privatization of all government corporations,
nominal gross domestic product. It has a population of over 207 aimed to attract foreign investment and decrease budget deficit. In
million (the world's 5th-largest), giving it a nominal GDP per October 2016, foreign currency reserves crossed $24.0 billion which
capita of $1,641 in 2018, which ranks 147th in the world for 2016. has led to stable outlook on the long-term rating by Standard &
Pakistan is a developing country and is one of the Next Eleven, the Poor's. In 2016, BMI Research report named Pakistan as one of the
eleven countries that have a potential to be among the world's ten emerging economies with a particular focus on its
large economies in the 21st century. The economy is semi- manufacturing hub.
industrialized where Primary export commodities include textiles,
leather goods, sports goods, chemicals, carpets/rugs and medical Despite of the challenges faced, there are number of factors favoring
instruments. The core sectors of Pakistan’s economy are the bright future ahead. Large agriculture base, developing
agricultural sector, the industrial sector, the manufacturing sector industrialization, abundance of natural resources, proximity of
and the service sector. All the sectors of the economy have shown emerging economic powers, like China, Russia and India, and young
growth in the fiscal year 2017. The agricultural sector grew at a population are some of the factors which indicate that Pakistan has
rate of 2.07% whereas the industrial and the manufacturing sector a huge economic potential. According to the World Bank, poverty in
both grew at a rate of 5.8% and 6.34% respectively. The service Pakistan fell from 64.3% in 2002 to 29.5% in 2014. Pakistan's fiscal
sector also showed improvement in the fiscal year 2017 by position continues to improve as the budget deficit has fallen from
expanding by 6.46%, whereas the overall GDP growth accounted 6.4% in 2013 to 5.8% in 2017. The country's improving
to 5.37%, which is the highest achievement since the year 2010- macroeconomic position has led to Moody's upgrading Pakistan's
11. debt outlook to "stable".
During the last few years the Pakistani economy has been facing a The new policies introduced by the government such as
multitude of challenges which have led the country to face privatization, de-regulation and facilitation amongst others have
stagnation and instability on the macroeconomic level. The fiscal resulted to an increase in foreign direct investment of 133.3% in the
deficit of the economy reduced to 5.8% of GDP in the year 2016- year 2013-14, from the year 2012 (Ministry of Finance, Economic
17 from 8.8% of the GDP in the year 2011-12, which clearly Survey). As a consequence, Pakistan is slowly but steadily making
depicts a huge improvement. Foreign exchange reserves are huge progress in creating an investment friendly environment for
bolstered by steady worker remittances, but a growing current foreign businesses. The major business areas in which foreign
account deficit driven by a widening trade gap as import growth businesses invest in Pakistan comprise of financial business, energy,
outstrips export expansion could draw down reserves and dampen communications, oil and gas exploration as well as chemicals and
GDP growth in the medium term. textiles. United States, Hong Kong, UAE, UK and Switzerland are the
countries from which the primary inflow of FDI comes from.
Brief Socio-Economic Outline of Pakistan
Overview Sector/Industry
Area: 796,096 Km2 Percentage of GDP 2017-18
Population: 212,742,631 Agriculture: 24.6%
Currency: Pak Rupee Industry: 20.8%
Exchange Rate: 1USD=116Rupees (2018) Manufacturing: 13.7%
GDP: $297.5 Billion Services: 60%
Inflation Rate: 6.50% Fiscal Year: 1July-30 June
Major Industries: Textile, Cement,
Agriculture, Fertilizer
Exports Imports
Exports: $21.95 Billion (2017) Imports: $48.5 Billion (2017)
Export Commodities: Cotton, Import Commodities Industrial
Textile, Rice, Carpet Equipment's, Vehicles, Petroleum
Main Exporting Countries: USA, Products
China, UK, Afghanistan Main Importing Countries China,
Japan, Taiwan
5
Manufacturing Sector Overview
Manufacturing sector is the backbone of Pakistan’s economy and Growth in Sub sectors and sectors weights in LSM for the period of
constitutes the second largest sector of economy contributing 13.5 July-March FY 2016 versus July-March FY 2017 are below. The
percent to Gross Domestic Product (GDP) It comprises mainly of performance of Textile sector having highest weight of 20.91 in
Large Scale Manufacturing (LSM) with 80 percent share in Quantum Index Manufacturing (QIM) remained depressed on
Manufacturing and 10.7 percent in GDP, whereas small scale account of lackluster performance of cotton yarn 0.78 percent and
manufacturing accounts for 1.8 percent in total GDP and 13.7 cotton cloth 0.51 percent having a combined weight of 20.15 in
percent share in manufacturing. textile sector.
Manufacturing Sector
Large-scale Small-scale Slaughtering Sectors weights of LSM
(80%) (13.7%) (6.7%) 5%
5%
5%
10.7% 1.8% 0.9% Iron & Steel Products

Automobiles
Contribution to GDP
21% Non-Metallic Mineral Products
58% Textile
During FY 2017, Manufacturing sector recorded an impressive
Coke & Petroleum Products
growth of 5.3 percent against 3.7 percent of last year which
6% Other
helped overall industrial sector to improve by 5.0 percent against
5.8 percent last year. The Year on Year (YoY), LSM recorded
significant growth of 10.5 percent in March 2017 compared to
7.6 percent of March 2016.
YoY- Growth in Sub sectors of LSM
30
23.51
25
LSM- YOY Growth
20 16.58
12.0% 10.5%
9.2% 15
10.0% 7.5% 7.7% 11.31 10.28
7.0% 7.2% 7.3%
8.0% 5.8% 10 7.11
6.0% 4.5%
4.0% 2.6%
1.8% 2.5%
2.1% 2.5% 2.0% 2.4% 5 2.4
1.3% 1.4% 0.66 0.78
2.0%
0
0.0%
Iron & Steel Automobiles Non-Metallic Textile Coke & Petroleum
-0.32
-5
Products Mineral Products Products
-10 -7.48
9mFY16 9mFY17
2015 2016 6
Textile Value Chain
The textile value chain consists of multiple industrial
5
sub-sectors. The value chain is quite long starting
from cotton picking to a finished garment of the
latest fashion. The end product of one sub-sector is
the raw material for the other. Each sub-sector in the
4
value chain contributes to value addition and
employment generation. Made-ups &
Garments
3 Complete
Garment Processing
Different articles including
2
Fabric readymade, bedsheets, towels are
processed from finished Fabric
Raw
Fabric
1
Dying and Finishing
Further after dying and finishing, Finish
Yarn fabric is produced
Weaving & Knitting
Yarn is further woven into raw fabric
Raw Material Spinning

Strings of fibers are produced from raw materials
to manufacture yarn.
Ginning
Raw Fibers is prepared by separating impurities by cotton balls
Textile is the most important manufacturing sector of Pakistan and has the longest
production chain, with inherent potential for value addition at each stage of
processing, from cotton to ginning, spinning, fabric, dyeing and finishing, made-ups
and garments. The sector contributes nearly one-fourth of industrial value-added,
contributes 8.5% of GDP and provides employment to about 40 percent (about 19
million) of countries workforce. Barring seasonal and cyclical fluctuations, textiles
products have maintained an average share of about 62 percent in national exports.
7
Pakistan Cotton Textile Statistics
Rotors Spindles
250,000 72% 16,000,000 85%
70% 70% 14,000,000 85%

200,000 84%
68% 12,000,000 10,998,890 11,057,945 11,263,025 11,288,105 11,338,000
68%
150,034 84%
150,000 66% 10,000,000
125,420 126,583 127,000 84%
113,323 115,041 64%
64% 64% 8,000,000 84%
100,000 62%
61% 6,000,000 84%
61%
60% 83%
50,000 4,000,000
58% 83%
2,000,000 83%
- 56%
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 - 83%
2013-14 2014-15 2015-16 2016-17 2017-18
No. of Rotors (000) Installed No. of Rotors (000) Capacity Worked
Installed Capacity Worked Efficiency
No. of Rotors (000) Efficiency
Pakistan is the 4th largest producer of cotton with the third Looms
largest spinning capacity in Asia after China and India and
10,000 76%
contributes 5% to the global spinning capacity. The Spinning 9,084 9,084
9,000 74% 8,188
Sector (output Yarn) is the backbone of the Pakistan’s textile 7,934 7,934
74%
8,000
industry. At present, as per record of Textile Commissioner’s 72%
7,000 6,384 6,384
Organization (TCO), it comprises 523 textile units (40 composite 5,890 70% 70% 70%
6,000 5,488
units and 483 spinning units) with 13.269 Million Spindles and 5,234
5,000 68%
185 thousand Rotors installed and 11.083 million spindles and 67%
4,000
140 thousands rotors in operation with capacity utilization of 84 66% 66%
3,000
percent and 76 percent respectively, during Jul-Mar, 2017. More 64%
2,000
than 65% of textile units are in Punjab followed by 25% in Sindh, 62%
1,000
approx. 5% in KPK and remaining in Baluchistan and Azad
- 60%
Kashmir. 2013-14 2014-15 2015-16 2016-17 2017-18
Problems of the power loom sector (output Raw & complete Installed Capacity Worked Efficiency
fabric/cotton) evolve mainly due to the poor technology and

scarcity of quality yarn. Looms installed in Cotton Textile Mills are
9,084 and Looms worked were 6,384.
8
Major Textiles Players
Nishaat Mills Limited
Yunus Textile Mills Limited
Gul Ahmed Textiles Mills Limited
Kohinoor mills Limited

All Pakistan Textile Mills Association
(APTMA)
Al Abid Silk Mills Limited
• All Pakistan Textile Mills Association
(APTMA) is the premier national
trade association of the textile
Al Karam Textile
spinning, weaving, and composite
mills representing the organized
sector in Pakistan.
ICC Textiles
• The Association's members produce
spun and open-end yarn, grey,
Sheh Taj group
printed dyed fabrics and bed linen.
9
Overview of Pakistan Exports
Total Export of Pakistan

30,000 61% 62%
60%
60%
25,131
25,000
24,515
57% 58%
PKR Million
20,000 55%
20,478
20,802
54% 56%
15,000
54%
13,589
13,856
12,531
12,494
13,156
10,000
23,885
52%
5,000 50%
- 48%
FY13 FY14 FY15 FY16 FY17
Total Textile Export Total country Exports Textile as % of Export
Textile Categories
• Pakistan country export is showing a decreasing trend
YOY (24.5 Bn FY13; 20.4 Bn FY17) and down surge at 2% 1%
a negative compound growth rate of 4% during the
review period (FY13-17). 3% 1%
• Textile exports representing majority of Pakistan Cotton & Cotton
Textile
exports (61% in FY17) are inline with the decrease
Synethetic Textile
trend of total exports and shown a negative
compound growth of 1% over the period (FY13-17). Wool & Woolen
• Cotton textile representing more than 95% of textile 96%
Textiles
exports stood at $12.5 Bn in FY17 as compare to 13.1
Bn in FY13.
98%
• Although woolen and synthetic export jointly
represents less than 4% of textile exports, both
shown a significant decrease in export trend over the Major Exports markets
period (FY13-17) and depict negative compound USA (17%), China (8%), Afghanistan (6%),
growth of 16% and 10% respectively. United Kingdom (8%), Germany (6%), UAE
• Exports revenue heavily reliant on textile (61% in (4%), Bangladesh (3%), ITALY (3%), Spain
FY17) where as textile represents about 6% of (4%), France (2%)
Pakistan total Imports 10
Pakistan Textile Export
Executive summary
Export of textile manufactures, which account for around 60 percent of total exports, registered a growth of 7.2 percent during first eight
months of current financial year 2018. All the sub-groups in this category witnessed a positive growth with the exception of cotton cloth,
cotton carded and tents, canvas & tarpulin during current financial year. Exports of value added textile like bed wear, knit wear and
readymade garments, towel and made-up articles (excluding towels) was up substantially during this period due to the growth in quantum
terms.
Exports of textile items like knitwear (Hs-61) which
Percentage Change in textile exports (FY16-18)
comprises 11.8 percent of total exports and 19.9 percent
20.0% of textile group increased in both quantity and value by
10.0% 2.7 and 13.3 percent, respectively. Readymade garments
(Hs-62) with share of 11.4 percent in exports and 19.3
0.0%
percent share in textile group increased in quantity by
-10.0% 12.8 percent and in value by 13.1 percent.
Cotton cloth (Hs-52) which represents 9.6 percent of
-20.0%
share in exports and 16.2 percent in textile group,
-30.0% decreased in quantity by 0.8 percent and its value
meagerly by 0.04 percent, respectively. One of the
-40.0%
FY(1 FY16 FY(1 reasons for the drop was sluggish Chinese demand for
5-16) -17) 7-18) cotton cloth and yarn.
Cotton Yarn -32.5% -5.1% 1.9%
Cotton Cloth -10.1% -6.2% 0.0% Bed wear (Hs-63) with a handsome share of 9.9 percent
Knitwear -2.1% -0.1% 13.3% in exports and 16.8 percent in textile group, increased in
Bed wear -4.1% 5.1% 4.5% both quantity and value by 2.1 percent and 4.5 percent,
Towels 0.2% -3.2% -0.3% respectively. Cotton yarn (Hs-52) has 5.8 percent share in
Made-up articles -3.5% 2.9% 7.3% total exports and 9.8 percent in textile group, increased
Readymade Garments 4.2% 5.9% 13.1% in both quantity and value by 9.8 percent and 1.9
Other Textile Manufactures -12.9% -12.5% 3.2% percent, respectively. Towels (Hs-63) having share of 3.5
Total Textile -8.2% -0.9% 7.2% percent in total exports and 5.9 percent share in textile
Cotton Yarn
Cotton Cloth HS-52 group, increased in quantity by 8.2 percent but in value
Knitwear HS-61 decreased by 0.3 percent. Raw cotton having a share of
Bed wear 0.4 percent in total exports and 0.6 percent in textile
Towels HS-63
Made-up articles group, increased both in quantity and value by 43.5
Readymade Garments HS-62 percent and 38.0 percent, respectively. (Refer section:
Other Textile Manufactures
Pakistan Cotton textile Trade statistics)
Export Vs Import Analysis
95% of 78% of
Pakistan Textile Pakistan Textile
Exports Import
Major Cotton Exports Major Cotton Imports
FY17 FY17
4%
4% 22%
19% 5% 31%
21% 23%27% 52
18% '63 19% 22%
17% 31%
29% 55
'52
FY15 '61 9%10%
9% FY15 54
18% 63
'62 26%
19% 22% Others
19% Others 24%
31% 24% 21%
28% 21%
27%
Six Major Cotton textile categories represents more than 90%, and 75% of total cotton textile exports
and imports respectively :-
• HS63-Other made-up textile articles; sets; worn clothing and worn textile articles; rags
• HS-52 Cotton
• HS-61 Articles of apparel and clothing accessories, knitted or crocheted
• HS-62 Articles of apparel and clothing accessories, not knitted or crocheted
• HS-54- Man-made filaments; strip and the like of man-made textile materials
• HS-55 -Man-made staple fibers
12
Export Vs Import Analysis
(1%) 7% CAGR
• Both HS codes jointly represents 57% of
and 37% of total exports & imports
respectively in 2017.
CAGR of Textile of Textile Imports
Exports (FY13-17) (FY13-17) • Others two major textile import of
Pakistan are HS-55 and Hs-54 which jointly
Textile- Export Vs Imports represents 42% (1.5 Bn USD) of total
16,000 30% imports (3.5 Bn USD) in 2017. It is
14,000
12,000
25% important to mention here that Pakistan
20%
MN USD
10,000 only exports 3% (280 m USD) of its total

8,000 15%
6,000 10% textile exports (13 Bn USD) of both these
4,000
2,000 5% categories (Hs-54 & 55).
- 0%
Exports 13,671 13,773 12,918 12,407 13,002 • Exports of Hs-63 is increasing by 2% (2013-
Imports 2,659 2,897 3,023 3,097 3,544 17) as compare to increase in imports 12%
Imports - % of Exports 19% 21% 23% 25% 27% over the same period.
Exports Imports Imports - % of Exports
• HS-52, exports are continuous decreasing
at a CAGR of 12 % over the period 2013-
Common Export & Imports 17, where as imports initially decrease but
70% later recover and depict a very less
60%
50% compound decline of only 2 % over the
40% same period.
30%
20%
10% • Textile Imports as a percentage of exports
0%
Exports Imports Exports Imports Exports Imports Exports Imports Exports Imports
are increasing year on year (2013-2017:
FY13 FY14 FY15 FY16 FY17 19% Vs 27%)
Hs-63 27% 7% 28% 8% 29% 9% 31% 10% 30% 9%
HS-52 39% 39% 34% 26% 31% 22% 28% 23% 27% 28%
13
 SWOT Analysis
 Fashion Ware
Cotton Statistics
Two main varieties of cotton are cultivated in

Pakistan.
I. American qualities
II. Local qualities
The government has established two cotton research

Centers at Multan (Punjab) and Tando Jam ( Sindh).
Cotton Growing Area Cotton Picking in Pakistan

In Pakistan, cotton is grown in canal irrigated areas of In Pakistan, cotton picking is done by manual methods,
Punjab and Sindh provinces. In the province of which must be done when more than 50% bolls are
Punjab, the Multan division ranks at the top, beside opened. One of the prime reasons of contamination of
this Bahawalpur, Dera Ghazi Khan, Faisalabad, Pakistani cotton is this method of picking up.
Sargodha, Lahore, Gujranwala and Rawalpindi Contamination of raw cotton can take place at every step
divisions lies according to ascending order of i.e. from the farm picking to the ginning stage. Since
production respectively. In these areas American cotton is picked manually by rural women in Pakistan, so
medium staple cotton is grown, and a small quantity there are number of causes involved in this
of native/local qualities of cotton is allowed to grow contamination.
for domestic use. The biggest cause of cotton contamination includes
The province of Sindh also produces cotton. The canal Human hair, dupatta (Head Scarf) and any fabric sheet
irrigated areas of Sindh, especially the Hyderabad used by women’s. In addition polypropylene bags used by
division, is at the top followed by few districts of pickers, leaves, flowers, immature balls (Due to disease),
Sukkur division. Both types of cotton are produced in trash and dust are the other main sources of
Sindh. contamination. Moreover, addition of water by pickers,
early morning picking of cotton before dew dry-up and
Cultivation storage of cotton on wet soil in order to increase its
Cotton is cultivated in summer season in Pakistan. weight spoils its quality.
There is little difference between the seasons in Brazilian cotton is famous among Pakistani importers due
various provinces. In the Sindh province, cotton to its quality. In Brazil, cotton is picked up using machines
cultivation begins in the month of April and its but in Pakistan cotton is picked up using human hands.
picking starts from august. In Punjab, Cotton is So, Brazilian cotton is widely used when contamination
grown mostly in the month of May or June and free cotton is required for manufacturing.
picking begins in September or October. 15
Cotton Statistics
Total Production Comparison- Pakistan
FY18
Change in Production YOY (FY15-18)
20%
10%
32%
26% 34% 0%
35% -10%
FY15 Sindh %
Punjab % -20%
65%
-30%
66% 74%
-40%
68%
-50%
FY15 FY16 FY17 FY18
Change YOY- Punjab % 12% -38% 10% 16%
Change YOY- Pakistan % 9% -29% 8% 12%
Change YOY- Sindh % 1% -3% 4% 5%
Change YOY- Punjab % Change YOY- Pakistan % Change YOY- Sindh %

Raw cotton and Yarn production YOY
4,000,000 10%
3,359,978 3,415,339 3,428,048 3,429,076 9%

3,500,000 3,323,655
3,059,976
8.6%
8% • Cotton production in province of Sindh is
3,000,000
7% showing an upsurge YOY (FY15-18).
2,500,000
6%
000’ Bales
2,000,000 5% • Total production of raw cotton is relatively

4% consistent as it increased at a Compound
1,500,000
1,029,090 1,036,100 1,036,950 1,039,183 1,043,340 1,043,653 3% growth of 1.4% (1.02 Bn sq.m in 2013-14 vs
1,000,000
2% 1.04 Bn sq.m in 2017-18).
1.6%
500,000 1.1% 1%
0.7%
- 0.1% 0.2% 0.4%
0.0% 0% • Production of Yarn has shown a decreasing
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
trend since 2013-14 till 2017-18.
Total Yarn Production(Tonnes) Total Production of Raw Cloth (000) (sq. m)
% Change Yarn % Change Raw Cloth
16
Cotton Statistics
Cents/b
Cotton Prices FY (13-17)
100
90
80
70
60
50
40
30
20
10
Months
PKR/ Cents/ Lb INR/ Cents/ Lb US/ Cents/ Lb
17
Cotton Balance Sheet- Pakistan
The production of cotton increased by 7.6 percent during last year while it recorded an increase of 11.8
percent in FY 2018 along with rise in cotton prices in international market depicts a positive growth in future.
The government has recently revised the export package by further relaxing performance parameters. It
remains to be seen how these measures draw a positive response from the local producers.
Pakistan Cotton- Balance Sheet (FY15-18)

16
14
3.3
12 2.4 2.9
10
Mn 480 lb. Bales
(10.4)
8 (10.3)
(10.3)
7.7 8.2
7.0
6
(0.1)
(0.3) (0.3)
2
2.9 2.6 2.7
2.3
0
Carryover- Production Imports Mill Exports Carryover- Production Imports Mill Exports Carryover- Production Imports Mill Exports End Season
FY15 Consumption FY16 Consumption FY17 Consumption Stocks FY18
Source: PCCC
18
 SWOT Analysis
 Fashion Ware
Cotton Production
Top Cotton Producers of the world
22% 22% 23% 23% 23%

8% 9% 7% 7% 7%
7% 6% 6% 7% 7%
11% 14% 13% 16% 17%
27% 25% 23% 21% 22%
26% 25% 27% 25% 23%
India China United States Brazil Pakistan Rest of the world
Change in Cotton Production

6 140
4 120
• China and India are world largest producers
Mn 480 lb Bales
Mn 480 lb Bales
2 100
jointly represents 25% share followed by USA, -
80
(2)
Pakistan and Brazil (4)
60
(6) 40
(8) 20
• India is the largest producer where as (10) -
Pakistan fourth largest cotton producer
India - (2) (4) 1 2
globally. China - (3) (8) 1 5
United States - 3 (3) 4 4
• USA, China and Brazil has the highest increase Brazil - (1) (1) 1 2
in the cotton production in last 2 years Pakistan - 1 (4) 1 1
Rest of the world - (1) (3) 3 4
World Total 120 119 96 107 122
• Overall the global Production shows the
decreasing trend until FY16, later it shows India China United States
recovery in production. Brazil Pakistan Rest of the world

World Total
20
Cotton Consumption
Top Countries by Cotton Consumption
27.1% 28.8%
27.5% 27.7% 26.5%
6.1% 5.9% 6.5%

5.7% 5.8% 6.6%
4.8% 5.3% 5.7% 6.1%
9.5% 9.6% 9.4% 9.4% 9.5%
21.1% 22.3% 22.5% 21.8% 22.0%
31.4% 30.4% 31.2% 32.7% 33.1%
China India Pakistan Bangladesh Turkey Rest of the world
Change in Cotton Consumption
3.0 122
2.5 120
• China is the largest consumer of 2.0 118
cotton and showing and increasing 1.5
Mn 480 lb. Bales
Mn 480 lb. Bales

116
1.0
trend YOY (2015-18). 0.5
114
112
-
• Bangladesh, Vietnam and Turkey are (0.5)
110
(1.0) 108
increasing there consumption and 106
(1.5)
emerging as new global competitors. (2.0) 104
China - (0.5) 1.0 2.5 2.5
• Overall global consumption is India - 1.3 0.3 (0.8) 0.2
increasing as to that 121 million bales Pakistan - 0.2 (0.3) - 0.1
Bangladesh - 0.5 0.5 0.4 0.6
in FY18 as compare to 110 million
Turkey - 0.1 0.3 (0.2) 0.7
bales in FY14 Rest of the world - 0.3 (1.3) 0.6 1.9
World Total 110 112 112 115 121
China India Pakistan Bangladesh

Turkey Rest of the world World Total
21
Cotton Imports
Top Cotton importing Countries
25% 27% 27% 29% 25%

3% 3% 7%
7% 9% 9% 6%
10% 9% 9%
10% 8%
10% 10%
12%
23% 13% 13%
34% 12%
13% 15% 17%
12%
8%
13% 16% 18% 18% 19%

Bangladesh Vietnam China Turkey Indonesia Pakistan Rest of the world
• Vietnam cotton imports have increased more than twice Change in Cotton Imports
since FY13, Bangladesh has also shown a considerable 3.0 42
increase in imports by more than 40% during the same 2.0 41
Mn 480 lb. Bales

1.0 40
Mn 480 lb. Bales

period. -
(1.0)
39
38
(2.0) 37
(3.0) 36
• Pakistan share of import accounts for about 7% of the (4.0) 35
(5.0) 34
world in FY18 and also increase from 3% share in FY14 (6.0) 33
(7.0) 32
• Pre FY2013, China carried out massive procurements of Bangladesh - 0.5 0.7 0.3 0.7
Vietnam - 1.1 0.2 1.0 1.3
cotton with the intention to encourage its farmers to
China - (5.8) (3.9) 0.6 0.1
manufacture greater quantities of the crop. Given the Turkey - (0.6) 0.5 (0.5) 0.3
large scale of its operations, China’s policy increased Indonesia - 0.4 (0.4) 0.5 0.0
worldwide demand and resulted in inflated world cotton Pakistan - (0.3) 2.4 (0.9) 0.5
prices, rising to a high of 229.7 US cents/lb. in 2011. Rest of the world - (0.4) (0.2) 1.2 (1.2)
World Total 41 36 35 38 39
• China’s policy reversal resulted in as significant decline in Bangladesh Vietnam China

prices which fell to a low of 67.5 US cents/lb in Turkey Indonesia Pakistan
November 2014. As a result china imports decrease by Rest of the world World Total
more than 50% post FY13. 22
Cotton Exports
Top Cotton exporting Countries
29% 31% 30% 26% 25%
4% 3%
6% 7% 6% 10%
10%
12% 7% 8% 11%
7%
5% 11% 12% 12% 11%
23% 12% 17%
40% 39%
26% 32% 26%
United States India Brazil Australia Uzbekistan Rest of the world
Change in Cotton Exports

8.0 42
41
6.0
Mn 480 lb. Bales

40
4.0 39
Mn 480 lb. Bales

38
2.0
• USA and Brazil has emerged -
37
36
35
the largest exporter of the (2.0) 34
33
cotton jointly representing (4.0)
32
(6.0) 31
50% of world export . FY14 FY15 FY16 FY17 FY18
United States - 0.7 (2.1) 5.8 0.6
• Australia and India are both in India - (5.1) 1.6 (1.2) (0.1)
Brazil - 1.7 0.4 (1.5) 1.4
the top 5 exporters of world
Australia - (2.4) 0.4 0.9 0.2
where as Indian cotton Uzbekistan - 0.3 (0.4) (0.7) (0.2)
exports are decreasing YoY Rest of the world - (0.5) (0.5) (0.7) 0.1
2013-18 World Total 41 35 35 37 39
Axis Title
United States India Brazil Australia

Uzbekistan Rest of the world World Total 23
Cotton Inventory
Top Cotton Inventories Globally
15% 13% 14% 15%

18%
2% 3%
2% 3%
2% 3%
2%
2% 3% 4% 3% 3%
7% 6% 3% 3%
6% 8% 5%
11% 12% 10% 9%
13%
14%
61% 60% 61%

56%
46%
China India Brazil United States Australia Pakistan Rest of the world
Change in Cotton Inventories

6.0 120
Mn 480 lb. Bales
Mn 480 lb. Bales

4.0 100
2.0
• World stock of cotton has grown -
(2.0)
80
60
extensively and reached at its (4.0)
(6.0) 40
peak (110 million bales) in FY14 (8.0)
(10.0) 20
as compare to FY11 where (12.0)
-
50million bales China - 4.2 (8.7) (9.8) (7.5)

India - 2.0 (3.5) 1.2 1.5
• Later china sold its inventories Brazil - (0.1) (1.4) 1.2 1.2
United States - 1.3 0.2 (1.1) 2.0
(63,412 tones of cotton in FY15)
Australia - 0.0 0.1 0.3 0.9
and eventually its stock has Pakistan - 0.4 (0.3) (0.4) 0.5
decreased from the 60% of the Rest of the world - (0.1) (2.0) 0.4 2.8
world inventories to almost 50% in World Total 103 111 95 87 88
FY18. China India Brazil United States
Australia Pakistan Rest of the world World Total
2018 Punjab Board of Investment and Trade I Transaction Department. All rights reserved 24
 SWOT Analysis
 Fashion Ware
HS-63- Country Analysis
31% of
2% CAGR Top Exporting Counties
Cotton Textile
(FY13-17) FY18
Exports United States of
America
Export Analysis- Country wise United Kingdom
33% 35%
33% 35%
150 4,000 31%
37% Germany
3,950
100
50
3,900
3,850
FY15
Netherlands
Mn USD
3,800 4%
0
3,750 4% 5%
4% 8% 15% Belgium
-50 3,700 5% 15%
Mn USD
3,650 6% 8%
-100 14%
3,600 8% Rest of the World
-150 3,550
United States of America - (35.0) 16.7 (85.2) 57.3
United Kingdom
• Top five countries represents 67 % of Pakistan
- 95.4 2.8 3.0 0.1
Germany - 67.2 (23.6) 4.4 28.1
exports of this article in 2017.
Netherlands - 43.8 (0.3) 41.1 17.0
Belgium - 26.4 (26.2) 5.2 6.5 • Exports over the period of five years is
Rest of the World - 23.1 (116.1) 75.7 42.9 increasing with exception to 2015 where total
World 3,685 3,906 3,760 3,804 3,956 exports of Hs-63 decrease by 4% as compare to
United States of America United Kingdom
2014.
Germany Netherlands
• Exports to Uk and USA is relatively consistent
Belgium Rest of the World
where as Netherland, Belgium and Germany
World
exports of Hs-63 is increasing over the period.
HS-63: Other made-up textile articles; sets; worn clothing and worn textile articles; rags
26
HS-63- Product wise Analysis
Export Analysis- Product wise

200 4,000 Export Analysis- Product wise
3,950
150 FY17
3,900 10%
100 12%
11%
3,850 11%
6302 '6307
50 3,800 FY15
Mn USD
Mn USD
others
77%
- 3,750
79%
3,700
(50)
3,650
(100)
3,600
• Two categories majorly represents
90% of the total exports of Hs-63.
(150) 3,550
6302 - 174 (119) 81 149 • Total exports of Hs-63 increased by
6307 - 20 6 (11) 17 151m USD in 2017 where as exports
Others - 27 (34) (25) (14)
of Hs-6302 increased by 149m USD
World 3,685 3,906 3,760 3,804 3,956
representing the top share.
6302 6307 Others World
Bedlinen, table linen, toilet linen and kitchen linen of all types of textile materials
Hs-6302
(excluding floorcloths, polishing cloths, dishcloths and dusters)
Hs- 6307 Made-up articles of textile materials, incl. dress patterns, n.e.s. 27
Top Exporting Countries
27% of
(10%) 25%
28%
China
Bangladesh
Cotton Textile 38% 31% Turkey
CAGR (FY13-17) 38%
38%
Exports Italy
FY15 Portugal
Germany
Export Analysis- Country Wise 3%3% 15%16% 16%
3% 3%4%3% United States of America
200 6,000
3% 3%3% 5% 4% Rest of the World
100 3% 6%
-
5,000 4% 5%
FY18
4,000
Mn USD
(100)
3,000 • Top five countries represents 56 % of Pakistan
Mn USD
(200)
(300)
2,000 exports of this article in 2017.
(400) 1,000 • Exports over the period of five years is
(500) - continuously decreasing at a CAGR of (10%) and
China - (410.7) (263.6) (293.5) (82.8)
stood at 3.49 Bn USD in 2017 as compare to 5.3
Bangladesh - (21.1) 9.5 (30.0) (25.3) Bn USD in 2013.
Turkey - 21.2 (59.6) 13.0 79.2 • China the largest importer of Hs-52 from Pakistan
Italy - 0.5 (31.8) 5.2 13.0 has decreased its cotton stock policy post 2014 as
Portugal - (0.2) (7.8) 6.2 22.9
a result Pakistan’s exports of Cotton has come
Germany - (6.0) 0.5 (8.3) (5.1)
down. (China 36% share in Pakistan exports year
United States of America - 0.0 (6.1) (14.0) 2.1
Rest of the World - (186.2) (332.3) (221.5) (3.6)
2013 to 25% share in 2017).
World 5,334 4,731 4,040 3,497 3,498 • Pakistan export to Bangladesh, USA and Germany
China Bangladesh
have decreased slightly YOY (2013-2017).
Turkey Italy
• Importantly, exports to Turkey, Italy and Portugal
Portugal Germany
have increased considerably in last there years
United States of America Rest of the World
(2015-17) jointly by 115 m USD in 2017 and 25m
World
USD in 2016.
HS-52: Cotton
28

50.0 6,000
12%
11%
- '5205
5,000
12%
10%
(50.0) 11% 34%35% '5209
10%
38%
'5208
(100.0) 4,000
FY15 '5210
15%
Mn USD
Mn USD
(150.0)
16%17% Others
3,000
(200.0) 25%
27%
(250.0) 2,000
27% FY18
(300.0)
1,000
(350.0) • Four categories majorly represents
(400.0) - almost 90% of the total exports of Hs-52.
'5205 - (333.8) (341.8) (343.0) 30.3
'5209 - (150.9) (53.1) (70.1) 4.8
• Export to all categories of cotton are
'5208 - (16.0) (102.8) (43.1) (27.8) decreasing as post 2013, prices of cotton
'5210 - (51.8) (56.0) (4.7) (30.4) has come down and china policy shift of
Others - (49.9) (137.4) (81.9) 23.4 massive procurement has ended. (being
World 5,334 4,731 4,040 3,497 3,498 the major producer in the global market,
'5205 '5209 '5208 '5210 Others World china influence on cotton market boosted
the demand for overall cotton importers
globally pre 2013.
Hs-5205 Cotton yarn other than sewing thread, containing >= 85% cotton by weight (excluding that put
Hs-5209 Woven fabrics of cotton, containing >= 85% cotton by weight and weighing > 200 g/m²
Hs-5208 Woven fabrics of cotton, containing >= 85% cotton by weight and weighing <= 200 g/m²
Hs-5210 Woven fabrics of cotton, containing predominantly, but < 85% cotton by weight, mixed principally
29
20% of
5% CAGR
Export Analysis- Country Wise
150.0
100.0
3,000
2,500
Cotton Textile
(FY13-17) 50.0 2,000
Exports - 1,500
Top Exporting Countries (50.0) 1,000
(100.0) 500
21% 23% 24% 26% 26% (150.0) -

6% 5% United States of
4% 6% 5% 7% - 21.7 (44.9) (113.8) (13.3)
6% 6% America
5% 8%
6% 6% 8%
United Kingdom - 56.3 (2.6) 1.6 44.5
14% 7% 8%
15% 15% Germany - 34.5 (11.0) 36.2 32.0
15% 16% Spain - 68.3 2.8 32.7 20.5
Netherlands - (1.6) 8.7 (7.2) 42.8
50% 45% Rest of the World - 118.1 3.9 38.4 42.0
44% 39% 36% World 2,105 2,403 2,360 2,347 2,516
United States of America United Kingdom

FY13 FY14 FY15 FY16 FY17 Germany Spain
United States of America United Kingdom Netherlands Rest of the World
Germany Spain World
Netherlands Rest of the World
• Top five countries represents 74 % of Pakistan exports of this article in 2017.
• Exports over the period of five years is relatively consistent an depict a CAGR of 5%. (stood at 2.5 Bn USD in 2017
as compare to 2.3 Bn USD in 2013.
• Pakistan Export to USA its largest exporting country is showing a decreasing trend. overall CAGR of (4%) and
decrease the most by 11% in 2016. Exports to all other countries are increasing year on year.
HS-61 Articles of apparel and clothing accessories, knitted or crocheted 30
Export Analysis- Product Wise
21% 21% 20% 21% 20%
6%
• Five categories majorly
6% 6% 6% 7%
6% 7% 7% 8%
represents 73% of the total
9%
13% 11% 13%

exports of Hs-61.
13% 12%
14% 13% 14% 13% 13% • Total exports of Hs-61

increased by 168m USD in
18%
16% 19% 19% 19% 2017 compare to last year
whereas the products with
24% 24% 22% 21% 20%
the least share increased
the most (HS-6110, 6116).
6105 6103 6115 6109 6110 6116 Others

120.0 2,600
100.0 2,500
80.0
60.0 2,400
Mn USD
Mn uSD
40.0 2,300
20.0 2,200
- 2,100
(20.0)
(40.0) 2,000
(60.0) 1,900
6105 - 59.1 (46.6) (35.2) 17.6
6103 - 101.0 9.5 1.4 31.5
6115 - 17.9 6.7 (18.8) 15.5
6109 - (5.8) 24.3 8.9 (0.5)
6110 - 42.6 1.4 21.9 49.4
6116 - 28.3 (4.2) (15.1) 42.9
Others - 54.2 (34.1) 24.8 11.9
Total 2,105 2,403 2,360 2,347 2,516
6105 6103 6115 6109 6110 6116 Others Total
31
19% of 7% CAGR 120.0

100.0
Export Analysis- Country Wise
3,000
Cotton Textile Exports (FY13-17) 80.0

2,500
60.0
2,000
40.0
Top Exporting Countries
Mn USD
Mn USD
20.0 1,500
-
1,000
(20.0)
29% 32% 31% 32% 33% (40.0)
500
(60.0)
(80.0) -
6% 6% FY13 FY14 FY15 FY16 FY17
7% 7% 7%
United States of America - (68.1) 35.3 6.7 35.7
13% 13%
13% 13% 12% Germany - 2.4 44.2 28.7 49.7
11% Spain - 63.5 24.1 (1.8) 28.6

14% 14% 13% 13% United Kingdom - 17.2 18.0 3.5 12.7
11% Belgium - 20.9 (4.3) 31.7 (1.9)
11% 12% 13% 14% Rest of World - 93.9 25.5 56.7 87.6
World 1,855 1,985 2,127 2,253 2,465
28%
23% 23% 22% 22% United States of America Germany
Spain United Kingdom
FY13 FY14 FY15 FY16 FY17 Belgium Rest of World
United States of America Germany Spain World
United Kingdom Belgium Rest of World
• Top five countries represents 67% of Pakistan exports of this article in 2017.
• Exports over the period of five years is continuously increasing and depict a CAGR of 7%. (stood at 2.46 Bn USD in
2017 as compare to 1.85 Bn USD in 2013.
• Pakistan Export of Hs-62 to Germany and Spain increased the most (CAGR of 12% each-FY13-17) followed Belgium
and UK (CAGR 9% & 5% respectively).
HS-62 Articles of apparel and clothing accessories, not knitted or crocheted
32

100%
12%
3% 5%
90%
80% • Two major categories represents more
26%
80%
6%
than 90% of the total exports of Hs-62.
2%
70%
60%
66% 37%
3%
• Total exports of Hs-63 increased by 610m
6%
50% USD from 2013-17 where exports of Hs-
40%
55% 6203 increased by more than 1 Bn USD
35% 4% 7%
30%
and Hs-6204 decreased by 383 Mn USD.
55% (market share in exports 12% in 2017 Vs
20%
37% 3% 7%
37% in 2013).
10% 52%
0%
'6203 '6204 '6207 Others

600.0 3,000
500.0
400.0 2,500
300.0
Mn USD
Mn USD
2,000
200.0
100.0 1,500
-
(100.0) 1,000
(200.0) 500
(300.0)
(400.0) -
'6203 - 114.9 88.9 305.3 501.8
'6204 - 7.6 82.4 (188.1) (285.4)
'6207 - 6.4 (16.6) 1.4 8.9
Others - 0.8 (11.9) 7.0 (13.0)
Total 1,855 1,985 2,127 2,253 2,465
Axis Title
'6203 '6204 '6207 Others Total

HS-62 Articles of apparel and clothing accessories, not knitted or crocheted 33
 SWOT Analysis
 Fashion Ware
SWOT Analysis
Strengths
• Cotton an ideal clothing material for countries like Pakistan where climate is sub-tropical with mean temperature on
a higher side.
• 4th largest producer of cotton.
• Cotton Spinning capacity in Pakistan falls among the top five counties. Thus value addition opportunities further
prevails.
• Domestic demand is continuously increasing due to change in trends and client base more inclined in to branded
lawns/ apparel and replicas.
• Export base economy with textile share more than 60 % will lead more growth potential and new opportunities.
Weaknesses
• Minimal and low value-added products dominate exports, constituting over 50% of the exported value. Cotton
cloth, cotton yarn, bed sheets and knitwear remain major export generators.
• Pakistan’s product mix of natural to synthetic fiber (80:20) does not correspond to the international standards
(60:40). The international product mix enhances the usability of raw material as synthetic fiber offers greater
flexibility as opposed to natural fiber.
• Lack of developed infrastructure facilities has hindered the growth of textile sector. The country wide energy crisis
has adversely affected the textile sector and led to closure and transfer of units to Bangladesh, Turkey and other
countries. The facilities installed require up-gradation but the sector is facing lack of from local bodies as well as
foreigners.
• Low yield as compare to other top producing countries.
• Unskilled or poorly trained Human Resources.
SWOT Analysis
Opportunities
• Pakistan’s textile trade is heavily tilted towards China. However, other markets like Africa and Russia can be
explored, which will not only broaden the export market but facilitate the enhancement of Pakistan’s exports to suit
the customer.
• With abundant good quality raw material at its disposal, Pakistan can alter its product line from low to high value
added items. Countries import raw material from Pakistan, process it and sell it with a high mark up which reflects
the significant impact of value addition.
• Sales are driven primarily through the “brand name”. Through in-depth research and effective marketing efforts,
Pakistan can either launch its own new brands or partner with existing ones to enter new markets .
• World-wide fashion industry is flourishing, the resources can be redirected to produce items that cater to
international demands.
• Under the GSP Plus regime all of the products of Pakistan’s export interest would be entitled to duty free treatment
which includes all Textiles, Textiles made ups, bed linen, garments, leather products, footwear, plastics, ethanol,
agriculture products and processed food etc. Out of a total of 6,000 products that are allowed duty free access,
Pakistan only exports 150 clearly indicative of the need to diversify.
Threats
• Declining international cotton prices have adversely impacted the local market as well. The reduction can be
attributed to lower demand on account of reduced prices of polyester, an alternate man-made fiber.
• China’s dismissal of the stockpiling policy has adversely effect Pakistan exports. For over 5 years, more than 60% of
Pakistan’s cotton yarn has been exported to China.
• Pakistan’s products become more expensive abroad as Euro has devalued considerably against Pakistan compared to
Chinese yuan and Indian rupee. Pakistan’s products become more expensive abroad, they become less competitive,
translating into decline in exports.
• As per the Trans Pacific Partnership, member countries will be allowed duty free import of goods. Pakistan’s major
markets like EU, USA and Canada are signatories to this agreement which would extend the preferential access to all
the members and provide a level playing field, posing a threat to Pakistan’s exports. Vietnam, as the third largest
garent exporter, and other countries like Malaysia and Mexico are expected to dent Pakistan’s exports share .
• As part and parcel of GSP Plus Status, Pakistan is required to adhere to the conventions of the United Nations, which
primarily pertain to human rights and good governance. Given the negligent implementation of these conventions in
Pakistan, any instance of non-compliance can result in suspension of the status as has been the case with Sri Lanka.
 SWOT Analysis
 Fashion Ware
Techniques to increase the textile industry growth
The industry is losing its competitiveness to other countries, especially to South East Asian Countries. Pakistan's main competitors in primary textile products with
the advantage of large engineering segment in this region are China, Bangladesh and India. Looking into the future, strong competitors like China can be used to
develop the industry with close cooperation and to start assembly plants under their guidance and cooperation.
To cater to the rising demand and challenges, the Industry is in urgent need of financial and technological investments.
Financial and technical investment The only country in this region without strong engineering base (using old less efficient machinery) is Pakistan and our
requirement in engineering industry dependence upon outside Engineering Industry keeps our cost of production higher with low engineering skills.
There is a need for the industry to improve the quality of its products. Also the industry require the need for greater
value addition in its products. There is Lack of expertise in the field of “Product development and design”. Currently, no
Improve quality and value addition
priority is given to establish and upgrade the areas of designing and development to create high demand of the local
product globally to compete professionally.
The textile machinery used in Pakistan is imported mainly from countries like Japan, Switzerland, Germany, China and
Increase training and development programs Belgium. There is lack of efficient training and development program from these countries. Further, intensive efforts are
require to improve the HR skill levels on the basis of intense trainings and setting up of required infrastructure (in
accordance with latest techniques and requirements to compete with the local as well as international Standards)
The textile industry is also unable to meet local and international demand (not fulfill the orders on time) due to
Need Stable political situation and reduce prevailing economic and political situation and the continuing energy crisis. Power shortage has led to closure of
Energy crises numerous textile mills in Faisalabad region. The government needs to step ahead and assure consistent supply of all
forms of energy to the textile segment of Pakistan.
High excise and import duties on raw material increases the prices of raw material. This will ultimately lead to
Raw material prices along with excise and Shortages of textile merchandize in the market (barrier to consistent supply in the industry) and unduly high prices
Import duties need to be generous for household commodities. The Government of Pakistan should launch and approve the development of a textiles
vision to provide consistent supply of raw materials to revive the textile industry.
Tax Refund from Government need to be Stuck-up tax refunds from the government leading to liquidity problems. The process should be efficient to
processed efficiently improve production and exports.
Development of strong R&D Facilities & Need of R&D facilities and strong infrastructure to deal with the current product innovation challenges and
Infrastructure sustainable growth of the industry.
There is a need to establish the market intelligence and refine the marketing and publicity framework in an effort
Establish marketing and publicity framework to build a high class image of the Pakistani textile products in the international markets.
One of the prime reasons of contamination of Pakistani cotton is this method of picking up. Brazilian cotton is
famous among Pakistani importers due to its quality, the reason being cotton is picked up using machines not
Machine base cotton picking facility human hands. Brazilian companies can offer their services to Pakistanis farmers and industrialist to get better
quality cotton.
 SWOT Analysis
 Fashion Ware
EU GSP Plus Scheme
Tariff preferences in the EU market enable Developing Countries to participate more fully in international trade and generate additional
export revenue to support implementation of their own sustainable development and poverty reduction policy strategies.
The European Union’s GSP covers three separate regimes;
(i) The standard GSP, provides preferences to 90 (previously 177) Developing Countries and Territories on over 6300 tariff lines;
(ii) The special incentive arrangement for Sustainable Development and Good Governance, known as GSP+, which offers additional
duty free exports to support vulnerable developing countries (previously 16 now 25 countries – Including Pakistan) in their
ratification and implementation of relevant international conventions in these fields;
(iii) The Everything but Arms (EBA) arrangement, which provides Duty-Free, Quota-Free access for the 50 Least-Developed Countries
(LDCs).
Pakistan has traditionally been benefiting from the standard GSP regime of the EU and our exports to the EU have been subjected to 20%
less duty than the normal MFN duties charged by the European Union. Before GSP Plus status, Pakistani products, especially; Textiles and
Garments, were facing stiff competition not only from efficient suppliers like; China, India, Indonesia, Thailand and Vietnam but were also
at a disadvantage through parallel exports from LDCs like Bangladesh, which were already accorded duty free access to the EU through
the Everything But Arms regime of the EU GSP.
Pakistan’s qualification as a GSP Plus beneficiary country would put us in a tremendously advantageous position, as;
(i) China, Colombia India, Indonesia, Thailand and Vietnam are not eligible for GSP Plus.
(ii) China and India has both graduated out of the Textile and Garments sections of the standard GSP, meaning whereby that imports
from China and India will not be benefiting from preferential duties either.
(iii) Pakistan and Bangladesh will only be the two textile and garment exporting country in the South and South East Asian region which
will have duty free access into the EU.
Taking the overall economic perspective of Pakistan in view, this opportunity not only promises manifold increase in our exports but
would also act as an instigator for; investment, both domestic and FDI, employment generation, inculcation of best practices resulting in
enhanced institutional capacity and sustained economic growth. Under the GSP Plus regime all of the products of Pakistan’s export
interest would be entitled to duty free treatment which includes all Textiles, Textiles made ups, bed linen, garments, leather products,
footwear, plastics, ethanol, agriculture products and processed food etc.
Lack of diversification, low income, low share in EU GSP imports and signing/ratification of the core Conventions are a prequalification for
a GSP Plus beneficiary country (which Pakistan fulfills), and the implementation of these conventions is the core issue which would
ensure Pakistan’s continuity in the GSP plus regime. In this regard the EU has devised a monitoring mechanism and it is expected of the
beneficiary countries to fully cooperate in providing information, whereby the EU would gauge the satisfactory implementation of these
Conventions, failing which, the country could face withdrawal of GSP Plus status.
40
 SWOT Analysis
 Fashion Ware
New Era in Ready-made Fashion
Wear Market for Pakistan
Apparel brand going Global
Our Fashion Designing & Apparel Industry is becoming The leading menswear fashion house is recognized for its
an important dimension of Pakistan’s economy due to revival of the ‘sherwani’, and for being Pakistan’s first
its export potential worldwide. In Pakistan , the international menswear brand.
significance of Fashion industry is being realized in view Famously known for designing sherwani’s for Mr. Pervez
of its huge potential for future expansion. Musharraf and Mr. Atal Bihari Vajpae. Amir Adnan
currently runs an outlet in Dubai. FnkAsia, another
Post 2010, Pakistan apparel brand have emerged in the brand under the label of Amir Adnan boasts a flagship
local market due to two major reasons, a specific cloth store in the USA.
which is Lawn and the Pakistani consumer is becoming
more brand conscious. Chen One, one of Pakistan’s leading Home textile fashion
house, operates seven outlets internationally, across
Apparel Brand like J. , Khaadi, Sapphire, Sana Safinaz UAE and Saudi Arab.
and etc. capitalized on the true value addition and side
by side consumer were becoming brand conscious
which help the apparel companies to yield high profit. Top Textile Brands of Pakistan
In the last 10 year first time ever apparel brand started
to cross borders. One apparel company which was
aggressive in there global recognition was Khaadi. The
luxury fashion house, Khaadi, first expanded
internationally to UAE in 2010. Khaadi now boasts
successful outlets in United Arab Emirates, Saudi Arab,
Australia, the United States of America, Mexico,
Malaysia, Canada and the United Kingdom.
To Follow was J. (Junaid Jamshed apparel brand) to

open store in Europe and GCC region. Relatively new
apparel brand Almas in there 3 year of business have
opened stores in Dubai.
42
New Era in Ready-made Fashion
Wear Market for Pakistan
Online Shopping and E-commerce Top E-commerce Player in Pakistan
Fashion has become an integral part of the operations of E-

commerce businesses. It has helped to contribute a great
deal to the revenues and profits of online businesses with
a recorded 16.648 million fans on the Ecommerce
platform.
Fashion designers, both male and female, have

mushroomed with the recent collection of the most
innovative clothing, footwear and accessories’ designs in
the fashion and apparel industry.
Amidst the lawn frenzy and designers swooping the

fashion arena with their latest lawn collections, most
recently, these fashion trendsetters will have set the stage
for the biggest fashion revolution in the country, in most
part led by E-commerce ventures and online businesses.
Top 10 E-commerce business now in Pakistan, when

started their operation 7 out of 10 started selling Ready
made garments. And the other remaining have now
started selling with the passage of time as the industry
started booming.
Biggest E-commerce platform Daraz had started selling

ready-made garment. All the apparel brand by the support
of local Logistics companies made their online platform.
According to a survey on e-commerce each branded
apparel online platform aided in 15 % of sale in 2017. 43
Local Ready Made Fashion Ware
Pakistani fashion garment industry is able to offer a large Export and Import of readymade garments is given
volume of its products for export. The industry turns out various under in the table. Pakistan exports fashion
kinds of garments for men, women, boys such as plain / garments to a number of countries. Major buyers of
embroidered /printed dresses, blouses, maxis, shirts, skirts, fashion garments during 2016-17 were USA, UK,
night dresses, track suits, middies, trousers, sub-dresses etc. Spain, Germany, Belgium, Spain The Netherlands,
Pakistani fashion garment industry is able to offer a large France, Italy and UAE.
volume of its products for export. The industry turns out various Major markets of import of ready-made garments
kinds of garments for men, women, boys such as plain / for Pakistan are China, India, UK.
embroidered /printed dresses, blouses, maxis, shirts, skirts,
Ready-made
night dresses, track suits, middies, trousers, sub-dresses etc. garments 2015-16 2016-17
Quantity Value (PKR- Quantity Value (PKR-
(Doz.) 000) (Doz.) 000)
Production of garments by units depends entirely on export
Exports 32,774,587 228,861,229 35,157,527 242,782,472
orders directly or indirectly. These orders have somewhat risen
in terms of value, but they have fluctuated widely in terms of
quantity. Export of fashion garments from Pakistan increased Imports 797,086 3,742,271 1,190,136 2,623,583
from 32.7 million dozens worth PKR 0.28 billion in 2015- 16 to

35.1 million dozens worth PKR 0.24 billion in 2016- 17, thus
showing an average increase of 6% in term of value. Top 5 Import Markets Of Ready-Made
Top 5 Export Markets Of Ready-Made Garments 30,000 Garment Pakistan 85%
80% 81%
25,000 78%
Pakistan 76% 80%
71% 20,000
600,000 71% 75%
500,000 70% 15,000 70%
69% 67% 70%
400,000 69% 10,000
68% 68%
300,000 68% 65%
5,000
200,000 67%
100,000 66% - 60%
2013 2014 2015 2016 2017
- 65%
2013 2014 2015 2016 2017
China United Kingdom
United States of America Germany India Bangladesh
Spain United Kingdom United Arab Emirates Percentage share of top 5
Belgium Percentage share of top 5
44
Global Ready Made Fashion wear
Mareket
The apparel segment is the highest value added a link in the
entire textile value chain. The global trade in the sector accounts Top 5 Importers of Fashion wear
for 53% of the total value of global textiles trade and is 50,000,000 48% 49%
48%
consistently growing since the last two decades. 40,000,000 47%
48%
48%
30,000,000 47%
The USA and the European Union remain as the largest markets 46%
for fashion garments and other apparel products with a combined 20,000,000 46%
share of 39 % in the total imports of Fashion wear clothing trade. 10,000,000 45%
US and European were the pioneers of creating brand and
In Thousands $
- 44%
extracting the highest value addition in the textile value chain. 2013 2014 2015 2016 2017
United States of America Germany
All the Top 5 importers of Fashion wear have well-established Japan France
Source : trademap.org
clothing brand which earns the highest value. Brands like Ralph
Lauren, Gucci, Louis Vuitton had changed the global arena and
brought the concept of brand creation, the rest of the world was
to follow. Concept of Local brand is relatively new in Pakistan.
Top 5 exporters of Fashion wear
Top 5 exporters of Fashion wear, China hold the highest share in 90,000,000 56% 56% 56%
57%
the manufacturing market and still haven’t emerged as a global 80,000,000
55% 56%
70,000,000
apparel brand creator yet. All the top 5 exports except for
In Thousands $
60,000,000 55%
Germany and Italy have lacked in creating world recognized 50,000,000
54%
apparel brands. 40,000,000 53%
30,000,000 53%
20,000,000
World Ranking in Exports of Fashion Wear 52%
10,000,000
- 51%
2013 2014 2015 2016 2017
17 China Bangladesh
8 Viet Nam Italy
2017
3 Germany Percentage share of top 5
2
Source : trademap.org
0 2 4 6 8 10 12 14 16 18
Source : trademap.org Pakistan India Vietnam Bangladesh

45
References
Pakistan Economic Survey

USDA
Trade Map
PACRA
Pakistan Central Cotton Committee
Pakistan Bureau of Statistics
Provincial Agriculture Department
Pakistan Cotton Ginners Association
Provincial Crop Reporting Service Departments
46
ABOUT US
Punjab board of investment & trade is a provincial
P ro j e c t s
trade and investment promotion agency established by
the Government of Punjab in 2009. In today′s global
economy, trade and investment play an increasingly
important role in generating means for transformative
and
Policy
change. At PBIT, we strive to ensure that this
transformative change is sustainable and more
impactful. PBIT is committed to enhancing the global
R e s e a rc h
competitiveness of Punjab and its business. To this
end, we work to attract new investments in the region
and strengthen the existing ones by promoting local
investment opportunities, facilitating businesses and
highlighting the distinct advantages of Punjab as a Department
business location.
Incorporated under Section 42 under the Companies
Ordinance of 1984, Punjab Board of Investments &
Trade (PBIT) assists companies which intend to invest Punjab Board of Investment and Trade targets a
in the manufacturing and services sectors of Punjab. socio-economic growth through its P&PR. The
The wide range of services provided by PBIT include department plans to fortify its deep roots, both
providing information on the opportunities for locally and internationally, by
investments, as well as facilitating companies which
reaching out to leading businesses for
are looking for joint venture partners. PBIT acts as
Punjab's marketing arm and actively promotes the discussing the panoramic commercial
province worldwide as one of the best investment hubs opportunities. As per the initiative of
in Asia. PBIT as Special Economic Zone Authority inventiveness, the department plans to provide a
Punjab also evaluates the applications/proposals from transaction advisory as defined in its role to
Developers to declare their Industrial Parks as Special bring-in the investments and establish new
Economic Zones. For granting one time import duty businesses. For this purpose, Pitch books of
exemption on machinery, equipment, spare parts,
different identified sectors are a new
consumables in Special Economic Zones, PBIT is
responsible to issue a confirmation Letter on the status resourcefulness of this department which would
of the applicant prior to seeking the permission from target to develop the in-house capacity of
the relevant department/agencies to claim for the production by connecting the local and
exemption. Investors are always encouraged to international market players. This would not only
discuss their project interests with PBIT officers, ensure the technology transfer but also create
wherein Information can be obtained on major several jobs in the province. The department
public/private projects, prevailing sectoral policy
plans to connect through the regional IPAs,
framework, existing incentive regime, financing
options, trade statistics etc. Punjab Board of
financial institutions, the embassies in different
Investment & Trade is a Steering Committee Member countries and local chambers as well so as to
and the Director of South Asia at the World fast-track the process of economic growth and
Association of Investment Promotion Agencies industrialization in Punjab in regard to its
(WAIPA) - a prestigious world association of recognition as ‘The Land of Opportunities
organizations similar to PBIT created by UNCTAD.
Punjab Board of Investment & Trade
23 – Aikman Road, GOR 1, Lahore. Pakistan
PABX: +92 (042) 9920 5201-06
Fax: +92 (0) 42 9920 5171
Web: https://www.pbit.gop.pk

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TEXTILE SECTOR OF PAKISTAN

Analysis by Projects & Policy Research Department | PBIT | Aug 2018

 Pakistan Textile Industry at a Glance

 Pakistan Cotton Industry

 Global Cotton Statistics Comparison

 Pakistan Cotton Textile Trade Statistics

 SWOT Analysis ……………………………………………………………………………………………………….............................35

 Pakistan Cotton Industry

 Global Cotton Statistics Comparison

 Pakistan Cotton Textile Trade Statistics

 Techniques To Increase the Textile Industry Growth

 EU GSP Plus Scheme

10.7% 1.8% 0.9% Iron & Steel Products

Raw Material Spinning

70% 70% 14,000,000 85%

fabric/cotton) evolve mainly due to the poor technology and

Nishaat Mills Limited

Yunus Textile Mills Limited

Gul Ahmed Textiles Mills Limited

Kohinoor mills Limited

Total Export of Pakistan

Total Textile Export Total country Exports Textile as % of Export

Major Cotton Exports Major Cotton Imports

10,000 only exports 3% (280 m USD) of its total

 Pakistan Cotton Industry

 Global Cotton Statistics Comparison

 Pakistan Cotton Textile Trade Statistics

 Techniques To Increase the Textile Industry Growth

 EU GSP Plus Scheme

Two main varieties of cotton are cultivated in

The government has established two cotton research

Cotton Growing Area Cotton Picking in Pakistan

Change YOY- Punjab % Change YOY- Pakistan % Change YOY- Sindh %

3,359,978 3,415,339 3,428,048 3,429,076 9%

2,000,000 5% • Total production of raw cotton is relatively

% Change Yarn % Change Raw Cloth

PKR/ Cents/ Lb INR/ Cents/ Lb US/ Cents/ Lb

Pakistan Cotton- Balance Sheet (FY15-18)

 Pakistan Cotton Industry

 Global Cotton Statistics Comparison

 Pakistan Cotton Textile Trade Statistics

 Techniques To Increase the Textile Industry Growth

 EU GSP Plus Scheme

Top Cotton Producers of the world

22% 22% 23% 23% 23%

26% 25% 27% 25% 23%

FY14 FY15 FY16 FY17 FY18

India China United States Brazil Pakistan Rest of the world

Change in Cotton Production

recovery in production. Brazil Pakistan Rest of the world

6.1% 5.9% 6.5%

21.1% 22.3% 22.5% 21.8% 22.0%

31.4% 30.4% 31.2% 32.7% 33.1%

FY14 FY15 FY16 FY17 FY18

China India Pakistan Bangladesh Turkey Rest of the world

Change in Cotton Consumption

Mn 480 lb. Bales

Mn 480 lb. Bales

China India Pakistan Bangladesh

Top Cotton importing Countries