Abstract

This study analyses Pakistan’s competitiveness in the textile industry compared to China, India, Bangladesh, and Vietnam. Pakistan’s textile industry contributes around 60% of the country’s export share. In the last twenty years, countries like China, India, Bangladesh, and Vietnam have increased their exports by many folds. Pakistan, on the other hand, has relatively stagnant textile exports. This study establishes impacts of Foreign Direct Investment (FDI), Natural Gas Rents (NGR), Tariff Rates (TR), Domestic Credit to Private Sector (DCP), and Revealed Comparative Advantage (RCA) on the Market Share as a dependent variable. Panel data analysis uses 19 years of data from the year 2004 to the year 2022 for 5 countries. The findings reveal that Pakistan despite having an increasing RCA lag behind in Market Share than its competitors. Increasing RCA shows that Pakistan’s exports are becoming more reliant on the textile industry, and still its share in global textile exports is on the decline as the economy fails to diversify its exports. On contrary, every other competitor has a declining RCA, diversifying their exports and still able to increase their market share in textile exports. The study concludes that streamlining export processes for each and every industry is essential for Pakistan to improve its competitiveness in the textile industry. These insights and many other discussed in the study provide a road map for policymakers and industry stakeholders to formulate strategies for sustainable export growth.