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More than 1,600 textile factories in Pakistan have shut down over the last sixteen months, dealing a significant blow to the country’s textile industry, according to Interim Commerce Minister Dr. Gohar Ijaz.
The impact of these factory closures extends across the entire value chain of the textile industry, affecting activities from ginning, weaving, spinning, and processing to garment manufacturing. Many remaining industries are also operating at reduced production levels.
The commerce minister highlighted that approximately 20 percent of the overall installed capacity in the textile and clothing sector has been impacted during this period.
In response to these challenges, the government is in the final stages of developing a strategic framework. This framework aims to address key issues in the textile industry, including providing regional competitive energy pricing, offering working capital support, expediting refund payments, enhancing market access, and diversifying product offerings.
Dr. Ijaz emphasized that the forthcoming policy announcement is expected to unlock the full production capacity potential within the country’s textile sector.
Recent data from the Pakistan Bureau of Statistics (PBS) reveals that the country’s exports in August 2023 amounted to $2.36 billion, marking a 4.8 percent decrease compared to August 2022. However, this data also shows a notable increase of 14.3 percent over the exports recorded in the previous month.
The commerce minister attributed this month-on-month growth to the positive impact of policies implemented by the caretaker government, whose members assumed office on August 17.
Dr. Ijaz further disclosed that the Federal Board of Revenue (FBR) is scheduled to transfer Rs. 31 to exporters’ accounts on the following Monday. This payment will be followed by additional refund payments to exporters, aiming to alleviate the working capital challenges faced by the industry.
