187 Textile Mills Shut Down in Punjab
Introduction
The textile industry in Punjab, the backbone of Pakistan’s economy, is facing a severe crisis. With approximately 187 textile mills shutting down, the sector is grappling with rising energy costs, outdated technology, and poor economic policies. The All Pakistan Textile Mills Association (APTMA) has urged the government to take immediate action to prevent further economic turmoil and job losses.
The Textile Industry Crisis in Punjab
Why Are Textile Mills Shutting Down?
The closure of 187 textile mills in Punjab is a result of multiple factors, including:
- High Energy Costs: Factories are charged Rs38 to Rs40 per kilowatt-hour (kWh), making production unsustainable.
- Outdated Machinery: Lack of investment in modern technology has decreased efficiency and output.
- Economic Policies: The absence of strategic policies to support the textile sector has led to an unstable business environment.
- Unfair Distribution of Energy Costs: Industrial units are forced to pay for line losses and capacity charges despite having minimal power theft.
The Economic Impact of Textile Mill Closures
Rising Unemployment and Socio-Economic Repercussions
The textile industry contributes over 60% to Pakistan’s exports and 8.5% to its GDP. The rapid closures have resulted in:
- Job Losses: Thousands of workers have lost their jobs, increasing poverty and unemployment rates.
- Decline in Exports: Pakistan’s export sector is shrinking, leading to a widening trade deficit.
- Economic Instability: The downfall of the textile industry is hurting investors’ confidence and limiting foreign investments.
Proposed Solutions by APTMA and Economic Experts
Lowering Energy Costs
APTMA Southern Zone Chairman, Naveed Ahmed, emphasized that energy prices must be reduced to Rs26 per unit to make industrial operations viable.
Establishing a Textile Development Bank
A dedicated financial institution should be set up to provide:
- Low-interest loans for technology upgrades
- Financial supervision and guidance
- Funding for research and development (R&D)
Creating Textile Tax Courts
A separate judicial system is needed for the textile industry to handle tax disputes efficiently, ensuring a smooth and transparent taxation process.
Encouraging Research and Development (R&D)
Model Textile Centers should be established for:
- Innovation in textile production
- Training of skilled workers
- Enhancement of production quality
Learning from Global Textile Leaders
Adopting Strategies from India, Vietnam, and China
Pakistan should study textile policies from countries like:
- India: Incentives for machinery upgrades and digitalization
- Vietnam: Government-backed financial incentives for textile exports
- China: Advanced automation and artificial intelligence in textile manufacturing
Strengthening International Trade Relations
Regional and Global Collaborations
Pakistan must explore mutual investment ventures with countries like Uzbekistan, Kazakhstan, Azerbaijan, and Bangladesh to strengthen its textile industry. Policymakers should also leverage China-Pakistan Economic Corridor (CPEC) Phase 2.0 for:
- Joint textile ventures
- Development of Pak-China Textile and Garment City in Faisalabad
Reviving the Faisalabad Textile Industry
Incentivizing Overseas Pakistani Investments
The government should introduce policies encouraging overseas Pakistanis to invest in the Faisalabad textile sector through a people-private partnership.
Halting the Conversion of Textile Units into Real Estate
The transformation of textile mills into housing societies should be legally restricted to preserve industrial growth.
The Road Ahead for Pakistan’s Textile Sector
A Call for Immediate Government Action
To revive the textile industry and prevent further closures, the government must:
- Implement sustainable economic policies
- Provide financial incentives and tax reliefs
- Ensure affordable energy supplies
- Encourage modern technological advancements
FAQs
1. Why are textile mills shutting down in Punjab?
Textile mills in Punjab are closing due to high energy costs, outdated machinery, poor economic policies, and an unstable supply chain.
2. How can the government support the textile industry?
The government can provide financial incentives, reduce energy costs, establish textile tax courts, and encourage R&D initiatives.
3. What is the role of APTMA in reviving the textile sector?
APTMA is advocating for lower energy costs, tax reforms, research centers, and the establishment of a Textile Development Bank to support the industry.
4. How does the textile industry impact Pakistan’s economy?
The textile sector contributes over 60% to exports and 8.5% to GDP, making it crucial for economic stability and employment.
5. What can be done to modernize the textile industry?
Upgrading machinery, adopting automation, providing subsidies for new technology, and encouraging joint ventures with China and regional countries are key solutions.
