The textile sector of Pakistan is all set to swell due to record exports after gaining an edge over its South Asian competitors amid the Covid-19 pandemic.
The country's textile exports are expected to surge 40% from a year earlier to a record $21 billion in the 12 months ending in June bringing cheer to its flailing economy, said Commerce Adviser to the prime minister of Pakistan Abdul Razak Dawood.
Dawood, while speaking with Bloomberg, said that the figure would expand to $26 billion in the next fiscal year, surpassing the nation's total exports in 2021.
Textiles amount to about 60% of Pakistan's exports – everything from denim jeans to towels for the US and Europe – is one of the country's few economic bright spots, reports the popular business news agency.
Pakistan allowed its factories to open ahead of India and Bangladesh when the pandemic began back in 2020.
This move led to them drawing orders from global brands including Target Corp and Hanesbrands Inc.
The Pakistani commerce adviser said, "A lot of orders actually were shifted from Bangladesh and India to Pakistan.
"The other good thing that's happening is we are now becoming competitive with Bangladesh. Three, four years ago, Bangladesh was really beating us."
Moreover, the government also plans to announce a proposal next month to provide incentives for exports to new markets such as Africa, South America and Central Asia, he added.
With measures such as tax breaks, cheap loans and supplying electricity at rates comparable to rivals in the South Asia region, Pakistan is doubling down to boost its exports.
A 60% decline in the local currency against the $ since 2018 has also helped cause.
Ahfaz Mustafa, CEO of one of the country's top brokerage companies Ismail Iqbal Securities, said, "Pakistan's exports have become competitive over the past few years. There is a fixed energy tariff regime that keeps in mind regional prices.
"The government is much quicker to refund the money it owes exporters and there has been a giant currency devaluation."
The South Asian neighbour of Bangladesh is looking to increase its exports to get out of regular boom-bust economic cycles that have led it to seek help from the IMF 13 times since the late 1980s.
It is also trying to revive a $6 billion bailout program to meet financing requirements amid a record trade deficit.
Meanwhile, speaking about the country's record high imports, Pakistan's commerce adviser said there is "very little" that can be done.
The country would be "under pressure" if oil hits $100 a barrel, furthered Dawood hoping that food-related imports will decline this year following a better domestic crop harvest.
Pakistan is also pushing to intensify trade with Central Asian nations by signing agreements and allowing free movement of trucks. Trade has grown to $120 million in six months of the current fiscal year from $14 million of the entire previous year, Abdul Razak Dawood added.