It has been noticed that a number of sectors in Pakistan like light engineering, pharmaceuticals, and food processing have a far larger export potential than textiles but they remain at the bottom of the policy planners' priority list. Hence, it would be better that the country enacts a broad based industrial policy that would provide equal growth opportunities to all the sectors of economy.

In the years right after independence, planners in Pakistan provided incentives to the textile millers by arranging foreign loans for the purchase of machinery. The intent was to convert the cotton grown in the country into yarn and earn higher foreign exchange than the country was earning by exporting raw cotton. This opportunity was grabbed by the textile millers after which they went on launching one spinning mill after another but they never went for higher value addition.

The value-added exports in textiles were introduced in the late eighties by small entrepreneurs who brought samples from abroad and started producing garments locally. Such entrepreneurs grew by leaps and bounds while adding to the bulk of value-added textile exports of the country. They flourished without any facilitation from the state or financing from the banks.

Now, the banks preferentially finance them because they are better paymasters than makers of basic textiles. They have no loans standing against them. To be honest, the sector in trouble is the basic textiles. Despite being pampered by successive governments for over half a century, Pakistan’s share in textiles is less than 1.6 per cent. In fact, it has declined from 2 per cent a decade ago to its current level. Non-cotton producing countries like Bangladesh and Vietnam command twice as much share in global textile trade.

It is interesting to note the total share of textile and clothing in global trade is only 6 per cent of total world trade. The share of engineering goods in total global trade is over 60 per cent. This sector has remained neglected despite the fact the highest value-addition can be obtained from engineering products.