Pakistani textile sector’s efficiency remains low in the region despite Rs. 20 billion annual Research and Development (R&D) support by the government. The R&D facility was withdrawn in financial year 2008-09, but the support could not achieve its goals set earlier. The R&D support covered product development, skill development and training, upgrading of information technology and professional consultancy.

In 2005, the government decided to provide Research and Development (R&D) support to units manufacturing and exporting textile garments at the rate of 6% of the value of the exports to EU and USA. In June last year, the government decided to withdraw this support. The R&D support was given to the sector under agreement in the WTO regime that required high standard of Pakistani goods. It was given 6 per cent on the value of export to the US and European Union on garments and 3% on fabric export. The R&D support of Rs. 12 billion was given to textile garments, Rs. 8 billion on home textile bed linen and Rs. 0.7 billion on denim.

Dr Mirza Ikthiar Baig, Advisor to Federal government on textile industry, said the R&D support was made available for research and to some extent to cut down high cost of doing business, which had increased over the years due to increase in bank mark ups, utility bills and raw material. Pakistan’s regional competitors Bangladesh, India and China are providing R&D to their industry leaving Pakistan a lead of around 15% in the cost of doing business. After R&D support, quality of Pakistan’s products has improved, but efficiency remains low. Quality is not issue, efficiency is low - waste percentage has increased, said Dr Baig.

He said labour productivity was very low in Pakistan. Our regional competitors took 75 minutes to complete and produce one piece whereas we took 133 minutes for the same work and we also waste 30% in finishing and 12% in washing.”

The countries with more support from their governments have been able to give tough time to their competitors. China topped the US market with a share of 36% followed by Bangladesh 21%, India 18%, Morocco 19%, and Pakistan 13%. Korea, on the other hand, lost 20% USA market share. Similarly, in the European market, China topped to gain 29% with Vietnam 28%, India 19% and Pakistan only 1.5% whereas Philippines lost 11%.

People in the textile industry say that it was passing through the worst times especially after withdrawal of R&D support. At least 30 percent Textile and made-up industry has faced closure leaving behind a large number of workers jobless. 90 percent of industry is already operating in one shift instead of three shifts previously.