Advisor for Commerce and Investment Abdul Razak Dawood said on Wednesday that the newly-approved textile and apparel policy will boost the industry's capacity, and help ensure sustainable growth of the sector's exports.

The federal cabinet approved on Tuesday the revised Textile and Apparel Policy 2020-25, after resolution of a dispute between Commerce Ministry and Energy Ministry on energy (electricity and RLNG) prices for the textile and apparel sector.

Also read: Revised Textile, Apparel Policy approved by cabinet

“The economy of Pakistan is moving in the right direction,” said Dawood, while addressing a news conference on Wednesday.

“One of the main objectives of the textile policy is to first, give our textile industry internationally competitive electricity and gas rates, and that has been a major impetus behind export growth.

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“In the textile policy, we are assuring the business people that we will give them international competitive prices. Furthermore, we will maintain tariff rationalisation,” he said.

“In last year budget, we reduced duties on the raw material and on the intermediaries for textiles, which would be maintained under this policy. We will also continue to give DLTL, we will also continue financing both long-term and working capital,” he said.

He said that the textile sector's position has improved in the last three years, as the government eyes to increase textile exports to $21 billion by the end of this fiscal year.

“This means that there will be an increase in textile exports of $6 billion,” said Dawood, terming it "very good progress".

Dawood said that the textile sector has grown by 23%, and the government expects the textile sector to grow by 26%.

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On the global share of Pakistan products, Dawood said that local yarn alone constitutes 7% share of the global market.

“(However) Pakistan’s overall share of the world textile market is 1.8%, which suggests that the textile sector still has a lot of space,” he said.

Highlighting the challenges pertaining to Pakistan exports, Dawood shared that "we need to move towards diversification and value-added products, maintain the competitive prices for energy and improve our infrastructure for garments particularly".

“We are exporting 75% of all our goods to only 10 countries. This means that we have not achieved the level of diversification required. Only 15 tariff lines in the customs book constitute 50% of our export,” he said.

The advisor said that the textile sector is bringing in machinery worth $435 million, and 50% of it has been imported whereas the rest remains, meaning that the textile sector would increase their capacity.

“Our biggest challenge is that we have to be able to make this growth sustainable, and this is the challenge of the government’s entire economic team. We do not want that after 2-3 years the textile sector dips,” said Dawood, while expressing confidence that sustainability would be achieved.