MFN status to India : Textile sector looking to cash in despite high production costs

Local manufacturers believe they have an edge when it comes to quality.

KARACHI: Leading home textile manufacturers of Pakistan are hopeful of getting a good market share in India because of their unique selling points as Pakistan and India are slowly moving to remove all trade barriers. However, some exporters are fearful saying that they will be at disadvantage once Pakistan and India open up bilateral trade owing to their small size and high cost of production in country.

The leading home textile makers of Pakistan are eying the strong middle class of India which they think is a big enough to attract any investor in the world. They say they have strong products that can easily penetrate the Indian middle-class market because of their quality and unique features.

Feroz Alam Lari, Chief Executive Afroze Textile Pvt limited says that Pakistan has developed strong products in the home textile range that can be exported to India.

Lari, whose company exports top quality bed sheets and towels is confident that he can manage to get a good share in Indian home textile market. “Pakistan and India are going on a right track of trade liberalization. Both countries should have opened up trade for each other long ago,” he said.

He believes this will lead to a growth in employment in both countries and give a boost to the industry, leading to exports to the developed world.

India with a population of well over a billion, and a middle-class of over 300 million is a potential market for Pakistani home textile products, he said.

Citing the example of cotton lawn, Lari said some of our cotton lawn brands have already created a niche market in India, which we can build upon.

However, there are some exporters disagree. They think industries in Pakistan have lost their competitive edge because of security issues, power shortage and rising cost of production. The total textile exports of Pakistan last year remained at $14 billion while Indian textile exports touched $24 billion in the global textile and clothing trade of $800 billion.

Chairman Pakistan Apparel Forum, Jawed Bilwani says that Pakistan can only compete with Indian finished products in textiles if these problems are addressed. “One thing that our exporters must realise is that we cannot ignore India. When Pakistan could sign Free Trade Agreement (FTA) with China which is even bigger than India why can’t we go with India?” he asked.

Governments of Pakistan and India are now aiming for a Preferential Trade Agreement (PTA) after which both countries will further open up their markets to each other. In next phase, India and Pakistan want to implement South Asian Free Trade Agreement (Safta).

Published in The Express Tribune, November 21^st, 2011.