EUROPEAN UNION DEMAND FOR PAKISTAN READY MADE GARMENTS

Faiza Mehmood

EUROPEAN UNION DEMAND FOR PAKISTAN READY MADE GARMENTS

Textile sector is the backbone of Pakistan’s economy which is significantly important for country’s export as well as employment. In Asia, Pakistan is the ninth largest exporter of textile products. This sector contributes 9.5 percent to the GDP and provides employment is about 30 percent of the workforce in the country (Government of Pakistan, 2014). After India and China, the fourth largest country of producing cotton is Pakistan and also the third spinning capacity within Asia. It contributes 5 percent spinning capacity all over the world. According to provisional State Bank of Pakistan (SBP) textile export were slightly lower at $9.59 million in July-March 2013-14 compared with $9.792 million in the same period of pervious year. These are three categories of textile, namely, textile fibers (26-category), textile yarn and fibers (65-category) and RMGs (84-category) .Pakistan performance in case of 26-category textile is satisfactory, while the import of 65 and 84-categories needs improvement. RMGs are important among all categories of textile.

RMG industry is an important small-scale industry of Pakistan. Its products have large demand both at home and abroad. The garment industry is also the good source of providing employment opportunities to a large number of people at a very low capital investment. The garment industry provides highest value addition in the textile sector.

Pakistan has strong trade partner with European Union (EU), particularly in case of RMGs. The European Union is an economic giant consisting of 28 developed countries namely, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia ,Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherland, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom. The EU accounts for around one-third of the world trade and therefore provides a huge market to developing countries, including Pakistan. She is the largest importer of textile and clothing products in the world.

Pakistan’s RMG sector has major problems areas: the quality of Pakistan’s RMG products is inferior as compared to her competitors like India, Korea, Hong Kong, Taiwan, Philippines and Sri-Lanka. Pakistan does not have the modern machine, it operates small and unorganized scale like shops, flats and houses. A large number of the unit has been closed due to the energy crisis. It has seriously affected our industries of Pakistan. Industrial production has downward due to the energy crisis. Due to which cost of production increased. In case of import of RMG in the EU, Pakistan’s as to compete with some major exporter like China, Turkey, India, USA, Switzerland, Republic of Korea, Japan, Egypt, Bangladesh, Tunisia, Vietnam, Sri Lanka; these countries currently enjoy good market shares in the EU. The Pakistan export depends mainly on cotton and textile products. The EU is a major destination for Pakistan’s export, wherein textile and clothing share more than half of the total exports.

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