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One of the major flaws in Pakistan's manufacturing industry has been its lack of emphasis on value addition. This is especially true for textile industry, where value addition remains weak with the emphasis being placed on raw cotton, cotton yarn, and cotton cloth. With falling cotton prices and lower demand in the global economy, its time that Pakistan's textile industry starts focusing more on value-added textile products like knitwear and garments.
Fortuitously enough, the latest trade data for February 2015 reveals exactly this; value-added textile exports were up year-over-year whereas non-value added items declined. For the eight months ended February 2015, the export of knitwear, bed wear, and readymade garments respectively grew by 5, 10, and 14 percent year-over-year. On the other hand, exports of cotton yarn and cotton cloth fell by 18 percent and 10 percent, respectively. Total textile exports for the month were Rs1.05 billion, a paltry two percent growth over February 2014.
Value-added textile produce has been on the up recently; over the past five fiscal years, readymade garments have shown the sharpest growth. Knitwear and bed wear slumped from FY11 to FY13, but rebounded in FY14. And with the positive 8MFY15 data on the back of GSP Plus, it seems that value-added exports are on track for further growth in FY15. Unfortunately, however, this still isn't reason enough to rejoice. Over the past five fiscal years, the value-added exports (readymade garments, bed wear, and knitwear) have ranged between 45-55 percent of total textile exports, unable to break through this level. True, the recent months do show an uptrend, but it isn't anything that hasn't been seen in previous years. So much for GSP Plus!
Given this, the February 2015 data for textile exports appears less impressive. The Ministry of Textiles comprehensive five-year Textile Policy (2014-2019) aims to address these issues, but so far there is little to show for.

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