News & Insights | Textile Industry

Pakistan’s Textile Sector Struggles Amidst Tough Competition from China and Weakened Demand

Published: June 21, 2024
Author: TEXTILE VALUE CHAIN

Pakistan’s textile sector faced a tough fiscal year due to intensified competition from China and weakened external demand, as reported in the Economic Survey 2023-24 released on Tuesday. Despite a lower contraction rate, the sector experienced an 8.3% dip from July to March 2024, compared to a 16% decline in the previous year.

The survey highlighted significant declines in cotton yarn by 12.2% and cotton cloth by 7.3%, which make up over 80% of the sector. This drop in production was attributed to reduced export values, competitive pressure from China, increased power tariffs, high costs of imported materials, and policy changes affecting the sector. Despite challenges, the textile industry remains a crucial part of Pakistan’s manufacturing landscape, contributing significantly to exports and employment.

The Economic Survey also pointed out issues in the cloth sector’s value-added production, emphasising the need for technological upgrades and better financing options. While textile exports saw an increase in quantity, the value of cotton cloth exports decreased in FY24, showcasing the sector’s ongoing challenges.

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