Page 8 - February-March 2021

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Overview of Pakistan’s

Textile Industry in the midst

of Corona Pandemic

With the unexpected arrival of the Pandemic that partners. Online business portals were also being
put a pause on everything, Pakistan’s textile utilized to manage the the local demand and
industry faced some challenges but quickly supply framework. By taking these quick
recovered and showed sign of growth. However, measures, the companies were able to obtain the
there is also a fluctuation over the periods as the key costs for Costs such as rents, salaries,
export sector saw a big shift. According to the insurances, premiums and wages.
statistics given by State Bank of Pakistan (SBP)
textile exports in 2020 declined to USD Now that the situation seems to be almost in
12,782,608 thousand from USD 13,580,585 control, the policies placed by the government
thousand in 2019. This decline is due to a that showed effectiveness and contributed in the
number of reasons such as fiscal and monetary recovery should be made permanent to reap long
policy at federal level, order cancellations and term benefits. Secondly, reduction in compliance
shipment delays amid pandemic-led global costs should be stressed upon by the
lockdowns as 84% of the enterprises were not government as these include borrowing from
operational during Covid-19. banks, border compliance and tax related
compliance. Lastly, Third, government should
• The first of the major factors that caused this bring in exemption on import items which are of
downfall of low revenue generation was the primary use in manufacturing the product.
reduction in export orders followed by disruption
in logistics, shift in consumer demand and The start of the year 2021 is a good one for
producer supply along with upstream and Pakistan as exports in the first seven months of
downstream chain distribution. FY21 increased 5.53% over the previous period's
• The second factor was the devaluation of value. According to the recently published
maintaining the cashflow which brought in summary on trade by the Pakistan Bureau of
financial challenges. Statistics (PBS).
• The third factor was weaker integration and
business to business (B2B) connect thus According to a World Trade Organisation (WTO)
hindering the local value chain. statement titled "World trade volume rallies in the
third quarter after Covid-19 shock", the third
The industry worked efficiently and adapted quarter of 2020 showed a recovery in global trade
quickly with the situation by allowing work from as the volume of business increased 11.6%
home for the employees during the temporary compared to the second quarter of 2020.
shut-down as major measures. Moreover, quick Although the figures were lower than the values
on their feet in innovation, factories started reported in December 2020, the year-on-year
manufacturing new products that were need of growth rate of exports was impressive, at 8.11%.
the hour such as KN95 masks and Personal On the other hand, imports too continued to
Protective Equipments (PPEs) to the exporting increase year-on-year, at 14.85%.

February/March 2021 February/March 2021