The textile industry of Pakistan is considered as the back bone of the economy, for its significant share in foreign exchange earnings. It contributes 64 of total foreign exchange earnings, 38 of industrial employment, 31 of the investment, 27 of the value addition and 10 of the Gross Domestic Product. Its share in the national exchequer, economic externalities and social activities is also important for the country. Without doubt the course of the Pakistan economy closely follows the growth and development of its textile industry. The industry has been facing various problems, including high cost of raw materials and overheads, a liquidity crunch due to long withholding of refundable sales tax and duty drawbacks, etc. With these frictions, the industry faces many problems in the international competitive environment. Now, with the coming era of free trade, the industry is preparing itself for global competition in textile trade. To meet the challenges of the Free Trade Regime, the government initiated in 2000 a plan under the title of Textile Vision 2005. One of its objectives is to raise Pakistan to 5th place in the textile trade from 8th in 1998. This plan was prepared with the help and consultation of all concerned segments of the Pakistan industry. Now the Pakistan textile industry is passing through a take-off stage, and the outcome of the Textile Vision 2005 can be observed through the rapid changes in the industrial indicators.
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