1. Contribution of textile in economy of Pakistan:
After the independence of Pakistan, Pakistan textile industry sector developed to a great extent and while the presence of many problems this sector fulfill the time needs at a large scale further due to its extent development this sector become the backbone of economy of Pakistan. This reality can without doubt be getting the picture by simple glimpse at the assistance of textile sector made the Pakistan economy as a complete. The development made by any sector of country can easily feel in many other attached sectors. Similarly implications of textile development can felt in case of textile industry. At this point, the conversation is narrow around the contributions and the effects of growth of Pakistan Textile sector to Economy of Pakistan.
1.1 Export:
Pakistan is currently 8th largest exporter of textile products in world. Contribution of Pakistan textile industry in export development fund is Rs. 2.5 billion. The total export of Pakistan textile products is around 12.5 billion in us dollars. Textile export is 53.2 percent of its total export and 46% of its total manufacturing. Share of Pakistan in world trade is less than one percent and the world textile trades total annual volume is 18 trillion US dollar. Three percent of U.S. textile needed imports from Pakistan. Second major importer of Pakistani textile cotton yarn is China. Sweden, Australia, Gulf region, EU, Hong Kong, Italy, UK, Japan, Saudi Arabia, Canada, Korea, Turkey, Norway, Germany and France are other big costumers of Pakistani textile products. Below is the figure that highlights the total textile products exported during 2009 -2010. Knitwear, tablecloth, cloth and scarf bed-sheets are major export to market of UK and UE is main customer in this type. Germany is another next large market of ready-made cloth and garments that imports from us mainly and the next one is Italy in cotton and cotton cloth. Along with countries of Scandinavian, the products of textile like garments are exported to Denmark and Denmark import all items in a small quantity from Pakistan.
Pakistan is one of top ten exporter of textile in the world. Export volume of Pakistan’s textile industry is 10313.2million US dollar with these 20 major countries. Garments has about 9-10 percent share in total textile export but has zero share in high standard sports kits brands. In this sector export is about 50 millions of dollars. Chain imports cotton yarn of 1.527 billion of dollar from Pakistan. China and Hong Kong are the main importer of Pakistani cotton yarn. During the fiscal year 2011-12 the export of yarn from Pakistan to china was more then 12.4% or approximately 4.6 billion in us dollars. During the same fiscal year the export of textile products from Pakistan to US was 2.98% the amount of which is approximately 2.98 billion in us dollars. During the fiscal year 2011-12 the export of textile manufactured goods from Pakistan to German was 1.6% or amounted 0.88 billion in us dollars. Similarly a small amount of 0.7% of Indian textile imports was exported by Pakistan the account of which is 0.888 billion us dollars. An increase in import of basic textile products by china from neighboring countries especially increase import from Pakistan is a life line for domestic textile industry.
1.2 Imports:
Pakistan has not its own engineering and did not have any domestic textile machinery. The machinery installed in textile mills, was imported from abroad. Still Pakistan imports textile machinery from Germany. Pakistan also imports machinery from Japan, Switzerland, China and Belgium.
1.3 Employment:
Other then the performance of textile industry this sector has also a major part in employment of labor force. 17 million peoples are employed in this sector which is approximately 39% of total labor employed in country. With the passage of time after agriculture sector this sector is most important for reducing unemployment.
1.4 Tax contribution:
Contribution of this sector in taxes is round about Rs.24.5 billion in fiscal year 2012-13 withholding tax. The ratio of withholding tax was 1.0% and collection of withholding tax was Rs.10.5 billion. 4 to 6% sales tax was implemented on domestic sales. The collection of sales tax per year is around 11 billion Pakistani rupees. Textile industry provides 2.5 billion of Pakistani rupees for export development fund.
1.5 Contribution in balance of payment:
On one hand it is a cause to reduce import and on the other hand it is helpful in improvement of balance of payment. Pakistan Textile sector has brought about configures modification in the pattern of countries international trade. As the export volume of country is about 10.2 billion us dollars so this sector not only helps for reduction of bill of imports but by providing import substitute it also reduce imports. Similarly this industry is helpful to keep balance of payment in control.
1.6 Contribution in national income:
The development of textile industry is a big contribution in Gross national product. It is major source of increase in national income. Textile has a big 10 percent share in GDP. Development of textile industry means increase in national income. As the investment increase employment and production also increases this entire means to increase in national income.
