Final Project

Submitted by: Nimra Shehzad (LCM-4013)

Hamna Siddiqua (LCM-3884)

Subject: Introduction to Social Sciences

Class: BBA-6B-Morning

Submission Date: 23/12/2022

Submitted to: Respected Sir Ahmed Zikriya

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Table of Content:

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Industrialization:

The process in which a society or a country transforms itself from a primarily agricultural society
into one based on the manufacturing of goods and services. Individual manual labor is often
replaced by mechanized mass production and craftsmen are replaced by assembly line.
Background of Industrial sector of Pakistan:
 Pakistan at the time of partition in 1947, had negligible industrial base.
 Out of 921 industrial units operating in the British India, Pakistan got only 34 industries
that is 4% of the total industries established in the Subcontinent
 There was no steel industry worth there are in Pakistan, whereas India had a sound
industrial base at the time of Independence.
 Since the division of the Subcontinent, the Government of Pakistan has been utilizing all
available resources domestic as well as external for rapid development of the
manufacturing sector.
 The Government of Pakistan being aware of the importance of industrialization for rapid
growth and development, called an Industrial Conference in December, 1947. The
Industrial Conference recommended the establishment of industries which use locally
produced raw material like jute, cotton, hide and skins.
 In order to expand the scale of production, the private enterprise was to be encouraged to
set up industries
 In the period from 1947 to 1950, the private entrepreneurs invested in those industries
which showed the highest profit. The contribution of industrial sector was 6.9% to GDP
in 1950.
Industries in Pakistan:
1. Textile Industry
2. Sports Industry
3. Telecom Industry
4. Cement Industry
5. Surgical Industry
6. Sugar Industry
7. Defense Industry

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 8. Auto Mobile Industry
9. Fashion Industry
10. Fertilizers Industry
11. Oil and Gas Industry
12. Chemical Industry
Textile Industry:
The textile industry is the largest manufacturing industry in Pakistan. Pakistan is the eighth
largest exporter of textile commodities in Asia. Textile sector contributes 8.5% to the GDP of
Pakistan. In addition, the sector employs about 45% of the total labor force in the country (and
38% of the manufacturing workers). Pakistan is the fourth largest producer of cotton with the
third largest spinning capacity in Asia after China and India and contributes 5% to the global
spinning capacity. At present, there are 1,221 ginning units, 442 spinning units, 124 large
spinning units and 425 small units which produce textile.

Explanation:
Textile Sector of Pakistan is the heart and soul of this nation since Independence. It is the largest
Manufacturing Industry in Pakistan. Export of $3.5 billion (6.5% of total exported cotton in
world) in 2017-2018. Pakistan is the eighth largest exporter of textile commodities in Asia.
Contribution in economy is equal to approx. 8.5% of total GDP. Textile Sector employs about
45% of the total Labor force in the country. In the year 2017-18 Exports of textile sector grew by
$4.4 billion. Pakistan is also third largest consumer of Cotton in the World. Total Textile mills
are 464 in Pakistan out of which five percent are on the PSX. Textile has a total processing
capacity of 5.2 billion square meters. International brands working in Pakistan with local textile
mills are namely; H&M, Levis, Nike, Adidas, Puma, Target etc. Textile businesses are
concentrated in Karachi with a share of 38% and 28% in Faisalabad. Out of 464, 316 textile units

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in Punjab, 116 in Sindh. Pakistan's exports are under threat mainly from regional competitors
because the governments of these countries support their textile industry a lot as compared to
Pakistan's government. Rs.185 million has been approved in Pakistan for the Export
Development Fund for the development of the textile sector. The textile industry provides 40%
of the bank credit in Pakistan.

In the 1950s, textile manufacturing emerged as a central part of Pakistan's industrialization,

shortly following independence from the British rule in the South Asia. In 1974, the Pakistan
government established the Cotton Export Corporation of Pakistan (CEC). The CEC served as a
barrier to private manufacturers from participating in international trade. However, in the late
1980s, the role of the CEC diminished and by 1988-89, private manufacturers were able to buy
cotton from ginners and sell in both domestic and foreign markets. Between 1947 and 2000, the
number of textile mills in Pakistan increased from three to six hundred. In the same time period,
spindles increased from 177,000 to 805 million.

There are 423 textile industries working in the country. Pakistan has a supply base for almost all
man-made and natural yarns and fabrics, including cotton, rayon and others. This abundance of
raw material is a big advantage for Pakistan due to its beneficial impact on cost and operational
lead time.
Cotton is the largest segment of textile production. Other fibers produced include synthetic fiber,
filament yarn, art silk, wool, and jute.

Cotton: Cotton spinning is perhaps the most important segment in the Pakistan textile industry
with 521 units installed and operational.
Synthetic fibers: Within synthetic fibers, nylon, polyester, acrylic, and polyolefin dominate the
market. There are currently five major producers of synthetic fibers in Pakistan, with a total
capacity of 636,000 tons per annum.
Filament yarn: Three types of filament yarn are produced in Pakistan. These are acetate rayon
yarn, polyester filament yarn, and nylon filament yarn. There are currently about six units in the
country.

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Artificial Silk: This fiber resembles silk but costs less to produce. There are about 90,000 looms
in the country located mainly in Karachi, Faisalabad, Gujranwala, and Jalapur Jattan, as well as
some in FATA.
Wool: The main products manufactured from wool include woolen yarn, acrylic yarn, fabrics,
shawls, blankets, and carpets.
Jute: Jute sakes and hessian cloth are primarily used for packing agricultural products such as
grain and rice. The production of jute products was approximately 100,000 tons in 2009-10.

Sports Industry:
Pakistan operates one of the largest and most prominent sports goods industries in the world. It
exports a large chunk of its sports goods to some of the most famous international brands
including Nike, Adidas, Puma, Umbro, Lotto, Wilson, Mitre, Micassa, Diadora, and Decathlon.
Owing to good quality as well as low manufacturing costs, our country has retained its position
as one of the leading players in the global trade of sports goods for decades. Sports goods in
Pakistan are supplied to both local and international brands. The products that are exported are
manufactured according to the requirement of a targeted market, which may vary from region to
region.

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Explanation:
The history of sports goods manufacturing in this part of the subcontinent dates back to the late
1800s. The foundation of the sports industry in the region was laid down by a British Army
Soldier Sardar Ganda Singh who established the very first factory manufacturing sports
equipment in the city of Sialkot. In the beginning, the factory was only producing sports goods
like cricket bats, polo, and sticks, but in the later years, it started manufacturing sportswear too.
The sports goods industry in Sialkot has grown by leaps and bounds in all these years. It has now
become internationally famous and one of the chief contributors in terms of exports of Pakistan.

Sialkot’s sports industry is over a century old and caters to many world-famous brands. Here
are some facts about it:

 The sports goods in the region are made with the finest of raw materials such as leather,
wood, glue, nylon guts, rubber, and different types of chemicals. They are not only of good
quality but are also extremely durable.

 Throughout history, Pakistan has exported sports goods to around 90 different countries
including Germany, the USA, UK, France, and Italy. This is how our country has acquired
a prominent position in the international trade of sports goods.

 The product range includes different types of sports equipment used in football, volleyball,
rugby, cricket, hockey, baseball, tennis, badminton, and a variety of other sports. It also
produces beach balls, nets, gloves, protective guards, pads, and sportswear.

 As discussed, world-renowned brands like Nike, Adidas, Puma, Micassa, Mitre, Umbro,
Select, Lotto, Diadora, Decathlon, and Wilson among many others have been sourcing a
large portion of their sports equipment and other related supplies from the sports goods

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 industry in Pakistan. This has greatly added to the credibility and diversified the portfolio
of the local sports manufacturers in the city of Sialkot.

 Footballs, gloves, and sportswear account for more than 80% of the total sports goods
exported. Footballs made in Pakistan have been used in international tournaments
throughout history. Brazuca and Telstar were the two Pakistani-manufactured footballs that
became a part of FIFA World Cups in Brazil and Russia, respectively. Pakistan also has the
honour of providing hand-stitched footballs for the world cups organized from 1990 to
2010.
 Despite operating at a very large scale, the sports goods industry in Pakistan is facing
challenges to sustain itself. So, let’s learn more about them and how they can be overcome.

Telecom Industry:

Recent liberalization of the telecom sector has made telecommunications one of Pakistan’s most
promising sectors. Today, four cellular companies are operating in the country with a customer
base approaching 188 million subscribers compared to 182 million last year. The private sector is
now actively involved in the expansion and development of telecommunication services. It
provides cellular telephone services, card payphone, internet/broadband services, and, with the
privatization of Pakistan Telecommunication Company Limited (PTCL), it also provides fixed-
line telephone services.

In the last few years, Pakistan’s telecom industry has shown notable growth on the back of an
uptick in e-commerce which increased the demand for connectivity, particularly during and post-
COVID-19 pandemic. This opportunity helped develop infrastructure and network for the

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industry, however, operational challenges like power cuts, stability and security challenges, fuel
price hike, and cost of operation are still inevitably high.

 Seeing the growth potential, the Government has unveiled 5G roadmap incorporating the testing
of 5G technology and allied services during FY21. With telecom operators rolling out 3G/4G
services, the number of broadband subscribers have grown quickly and stood at 110 million. This
surge has created a huge demand for smartphones, which is the top-selling category across all
major e-commerce platforms.

Telecom Infrastructure:

Pakistan’s telecommunications infrastructure includes Microwave radio relays, coaxial cable,

fiber-optic cable, cellular, and satellite networks. International links include landing points for
the SEA-ME-WE-3 and SEA-ME-WE-4 submarine cable systems that provide links to Asia, the
Middle East, and Europe; as well as the recently completed fiber-optic land cable from China to
the city of Rawalpindi. About 44,000 cell sites cover the longitude and latitude of Pakistan.

Tele-density:

At the end of FY21, Pakistan’s total tele-density increased to 87 percent. The cellular mobile
segment was the main contributor toward overall growth in the density.

Telecommunication Equipment:

The present market size for the import of telecommunication equipment (including handsets) is
estimated at $800 million. The world’s leading telecom infrastructure providers like ZTE and
Huawei have established branches in Pakistan and are engaged in design, development,
installation, configuration, and maintenance of telecom installations. Other vendors of telecom
equipment and services in Pakistan include Advance Digital, Inc., GD Satcom, iDirect, Comtech
EF Data Corp., NEC Corporation, Conexant Systems, Agere Systems, Cambridge Silicon,
Panasonic, Catecom, Quanta, Ruckus, Computational Systems, Tellabs, Symbol Technologies,
and Emerson Process.

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Leading Sub-Sectors:

 Telecom switches
 Radio communication links
 Fiber optic cables
 Towers, poles, ducts, and pits used in conjunction with other infrastructure facilities
 Tower sharing services
 Broadband services
 Back-up power for telecommunication towers
 Opportunities

The telecommunication sector in Pakistan experienced very rapid growth from over a decade.
With 3G/4G licenses in place, investment in this sector will continue. Pakistan is interested to
adopt latest technology along with the world and making notably efforts to advance to 5G
technology.

In addition to this, Pakistan has also implemented the world’s first open-source, full-fledged
Device Identification, Registration and Blocking System (DIRBS) to confront the menace of the
grey market for mobile devices and its negative impact on the mobile ecosystem. With the
introduction of DIRBS, legal imports have increased significantly, and local manufacturing has
also picked up. With this trend, Government has decided to introduce a comprehensive mobile
manufacturing policy to encourage and attract mobile manufacturing players to come to Pakistan
and establish their plants in Pakistan.

Cement Industry:
Cement is an essential part of infrastructure development and has a huge economic impact due to
complex supply chain processes. Global cement consumption is estimated to decline owing to
the outbreak of the covid-19 pandemic. However, the large-scale manufacturing sector
contributes approximately 9.5 percent to Pakistan’s GDP, and the government of Pakistan
announced a series of incentives during the fourth quarter of FY2020 to boost the sector (PES,
2021). The cement industry of Pakistan has an overall 5.3 percent share of Pakistan’s economy

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(SBP, 2020). It is a significant sector due to its direct influence on the country’s infrastructural
developments, construction activities, and linkages with multiple allied sectors such as steel,
wood, and tiles. The overall size of the sector is recorded at Rs. 345 million during FY2020
compared to Rs 413 million in FY2019, a decrease of 17 percent due to reduced prices in the
North Region amid increased supply and reduced demand (APCMA, 2021). As a result, the
sector contributed 0.85 percent to Pakistan’s GDP in FY2020 (PES, 2021).

The Cement Sector is composed of 19 companies, of which 16 companies and 24 plants are
operational. The sector is divided into two regions: North and South, with North covering areas
of Punjab, KPK and AJK and South including areas of Sindh and Balochistan. The cement sector
is highly organized and is oligopolistic in nature, with most players listed on the PSX. Market
capitalization for the sector is estimated at PKR 690bln. The growth of the sector is primarily
driven by overall economic growth and government spending on development projects (AHL
Research, 2021).

The per capita cement consumption in Pakistan is around 182 kg, whereas the world average per
capita consumption is around 500 kg, more than double the consumption in Pakistan, indicating a
vast opportunity to grow cement consumption. Pakistan’s local cement dispatches were recorded
at around 40 million tonnes in FY2020. The demand for cement is highly correlated to
government spending on development projects through the Public Sector Development Program
(PSDP). Due to the widening fiscal deficit, PSDP spending has greatly reduced over the last
couple of years. The cumulative spending of PSDP decreased by 28 percent from FY2019 to

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FY2020. However, due to China Pakistan Economic Corridor (CPEC) related developments, the
overall demand remained sustained at 40 million tonnes for the last three years. The incumbent
government also announced a construction package worth Rs 100 billion in FY2020. The
package includes tax incentives, waivers, and subsidies for builders, developers, and property
owners. The step greatly increased private sector investment in construction, and therefore,
boosted demand for cement (Jamal, 2020).
The cement sector of Pakistan is a booming industry with impressive growth trends. With timely
government intervention, the cement industry was able to achieve staggering growth in FY2020.
In addition to local consumption, Pakistan also exports cement to multiple countries. Cement is
an essential part of infrastructure development and has a huge economic impact due to complex
supply chain processes. As the cement industry increased its production capacity, the disaster of
covid-19 struck and restricted activity in the construction sector. However, in the backdrop of
government incentives, development schemes, construction of dams, and tax breaks, the
construction sector of Pakistan showed signs of increased activity and investment. Therefore,
future developmental projects show a promising future of the cement industry in Pakistan.

Surgical Industry:
The surgical instruments industry is mainly clustered in and around the skirts of Sialkot. Over
99% of the countries production is centered at Sialkot. The sector comprises over 2300
companies, of which around 30 can be considered large and the remainder can be split as 150
units of medium sized and remaining as small. The industry produces on average over 150
million pieces a year with an estimated value of around Rs 22 billion. Out of the total production,

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approximately over 95% is exported1. The industry belongs to the light engineering industry
category, and is one that has specialized in skill and stable export market share.Besides small and
medium units, a few units are large and have a 90% integrated system. Most of the larger and
medium sized firms are exporting, however, the smaller/vendor units usually supply to
commercial exporters/traders. The main raw material used in the production is ‘steel’. Around
60% of this steel is manufactured locally and the remaining 40% is imported from Germany
mostly.
For the purpose of trade; four broad categories can be defined where Pakistan is supplying in the
export markets. The categories include; (i) HS Code 9018 – Instruments for medical, surgical
and dental; (ii) HS Code 9021 – Orthopaedic appliances; (iii) HS Code 9022 – Equipment using
X-rays, alpha, beta, gamma rays. The exports of Pakistan predominantly fall in the category
9018.

The sector employs around 100,000-150,000 workers. However, employment is volatile as there
is high degree of temporary and contractual employment. Over the last four years the exports
from the sector has grown by just under 48% to get to US$245 million in 2009.

Pakistani exports make up only a small fraction of world trade in surgical and medical device
industry, which amounts to over $113 billion (just for above 4 HS Codes). This is one sector
where Pakistan has developed special capabilities to penetrate high income markets such as
Germany, USA, France, Belgium etc. The average export price of goods made in Sialkot is
around $1.5-2.5 (Note: some products sell for much higher prices – the price quoted is the
average trade price for disposable products), which is much higher than what Chinese products

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fetch (US$0.35 – in disposable products). However, the price is lower than some of the more
sophisticated producers such as Germany and France.

The sector, whereas, has achieved reasonable export performance growth in the recent years has
suffered from lack of product diversification, inadequate shift out of low value disposable
instruments to high value sophisticated products and uncertain business environment. The major
impediments of the sector are low levels of productivity, inadequate technology upgrade and
shortage of skilled staff. The production process value chain analysis suggests several
productivity detractors. Moreover, most of the companies operate without any brands with only a
couple moving to branding of their products. Furthermore, the industry in the years to come will
face higher compliance requirements, especially as the industry tries to diversify into more value
added products and enter into more sophisticated markets. Compliance, testing and certifications
are going to be critical for the the surgical industry to move up the value curve. Some firms have
developed basic design capabilities and often experiment by bringing in newer designs into the
market.
Sugar Industry:
Pakistan is an agricultural country, and agriculture is the backbone of economy. Sugar sector
constitutes 4.2 per cent of manufacturing. Pakistan is one of the main producers of sugar
worldwide. At the time of independence in 1947, there were only two sugar factories in Pakistan.
The output of these factories was not sufficient for meeting the domestic requirements. The
deficit was met through import of sugar from abroad and huge foreign exchange was spent on
this item. Need was felt to increase the production of sugar. Keeping in view the importance of
sugar industry, the Government setup a commission in 1957 to frame a scheme for the
development of sugar industry. In this way the first mill was established at Tando Muhammad
Khan in Sindh province in the year 1961. Currently there are 81 sugar mills operating in
Pakistan. Allauddin Masood, “Impact of sugar crisis, how the game was played”. Dawn 24
August 2009.
Sugar cane is the primary raw material for production of sugar. After Textiles, sugar industry in
Pakistan is the largest agro based industry, annual crushing capacity of over 6.1 million tones.
According to Ministry of Industries and Production; total crushing capacity of Sugar mills in
about 505,000 tons per day. The average capacity utilization of the sugar mills during the last

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five years remained 70 to 74%. Allauddin Masood, “Impact of sugar crisis, how the game was
played”. Dawn 24 August 2009.
According to Food and Agriculture Organization of The United Nations, sugarcane is grown
over a million hectares and provides raw material for Pakistan’s sugar mills. Its share in value
added of agriculture and GDP are 3.4 percent and 0.7 percent, respectively. Despite, this the
average sugar cane yield remained between 40-45 tons per hectare which is considerably less
than those obtained in many other countries. Average yield of sugarcane in the world is around:
65 metric tons per hectare and Asia 65.4 while China 77.1, India70.6, Pakistan 46.0, Philippines
92.6, Thailand 92.6, Australia 75.5 and Egypt 105 tons per hectare. The sugar recovery is 8.5%
against obtained recovery of 10.5%. Board of Investment, “An Introduction to Pakistan’s Sugar
Industry 2008”, Govt. of Pakistan, Production and Yield of Sugarcane, Economic Survey of
Pakistan 2008-09.
It is an important source of income and employment for the farming community throughout the
year the sugar industry employed over 75000 people (approximately), including management
experts, technologists, engineers, and financial experts, skilled, semiskilled and unskilled
workers. It is the matter of great concern that despite having a strong industrial and agriculture
base, the sugar industry is operating below 70% of its capacity there is a gaping wedge of over
10,000 MT/day between the demand and supply of sugar, which is the basic cause of recent
sugar crisis.

Defense Industry:

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The Defense Industry of Pakistan, under the Ministry of Defense Production, was created in
September 1951 to promote and coordinate the patchwork of military production facilities that
have developed since independence. The ministry also includes seven other specialized
organizations devoted to research and development, production, and administration.
Pakistan Navy is supported mainly by a facility at the Karachi Shipyard, which has limited
production capacity. In 1987, development of a submarine repair and rebuild facility at Port
Qasim was begun. By early 2000, in a joint project with China led to the development of the JF-
17 Thunder fighter and the Al-Khalid Tank. Pakistan also has taken major steps to becoming
self-sufficient in aircraft overhaul, modernization and tank and helicopter sales, and a transfer of
technology with France led to the construction of the Agosta B-90 Submarine in the late 1990s
and early 2000s. The two countries are participating in many joint production projects such as
Al-Khalid II, advance trainer aircraft, combat aircraft, navy ships and submarines. In 2016, the
Pakistani government managed to reduce its defense imports by 90%.

Auto Mobile Industry:

The automotive industry in Pakistan is one of the fastest-growing industries in the country,
growing by 171% between just 2014 and 2018. It accounts for 4% of Pakistan's GDP and
employs a workforce of over 3.5 million people as of 2018. Pakistan is the 35th largest producer
of automobiles. Its contribution to the national exchequer is nearly Rs. 50 billion (US$220
million). Pakistan's auto market is among the smallest, but fastest-growing in Asia.[citation
needed] 269,792 cars were sold in the year 2018 but declined to 186,716 in 2019 as a result of
austerity measures. Pakistan used to have a lot of Japanese cars in the 1990s and early 2000s.
With the launch of the first Auto Policy in 2005, Pakistan launched its very first indigenous car
Adam Revo but after the 2008 elections the dollar started depreciating and due to bad

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governance a lot of automakers started to halt production, and some even exited Pakistan. At
present, the auto market is dominated by Honda, Toyota, and Suzuki. However, on 19 March
2016, Pakistan passed a second "Auto Policy 2016-21", which offers tax incentives to new
automakers to establish manufacturing plants in the country. In response, Renault, Nissan, Proton
Holdings, Kia, SsangYong, Volkswagen, FAW and Hyundai have expressed interest in entering
the Pakistani market. MG JW Automobile Pakistan has signed a memorandum of understanding
(MoU) with Morris Garages (MG) Motor UK Limited, owned by SAIC Motor to bring electric
vehicles to Pakistan. NLC signed an agreement with Mercedes Benz for the manufacturing of
Mercedes Actros trucks in Pakistan. Pakistan has not enforced any automotive safety standards
or model upgrade policies. A few old models of vehicles including the Bolan and Ravi continue
to be sold by Suzuki. On 8 July 2021, Jolta Electric launched the production of electric
motorcycles.

On December 26, 2021, the Government of Pakistan announced a five-year policy between 2021
and 2026 to raise the production capacity of the automobile in Pakistan. On 20 October, the
Pakistani envoy to China said during the meeting with 50 Chinese automotive brands, that
Pakistan will increase its automobile production to 6-8 million units in the next five years.
Pakistan is building special economic zones, where Chinese companies are setting up their
businesses. In that meeting, 10 Chinese and Nasal automotive companies got ready to invest in
Pakistan.

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Fashion Industry:
Lahore, Karachi, and Islamabad hold the top places in the Pakistani fashion industry. The
industry is led by collectives like the Karachi-based Fashion Pakistan and Lahore-based Pakistan
Fashion Design Council. The industry caters to the summer season, known as the lawn season in
industry terms, and the spring season. The lawn season, which remains popular across Pakistan
and South Asians in the West, produces lightweight, breezy wear with pure cotton yarn; the
products range from salwar kameez to the airy tunic and trouser suits. Lawn season is also
known for its fashion wars wherein designers compete as the lawn market is estimated at USD
50 billion. The big names and brands of the fashion industry include Gul Ahmed, Maria Butt,
Shamoon Sultan, Zara Shahjahan, Deepak Perwani, Sanam Chaudhri, Khadijah Shah, Hussain
Rehar, Zainab Chottan.

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Explanation:
The fashion industry initially catered to the high-end customer base and the high prices kept
most products out of reach of the common people. However, the rise of urban class, working
women, and increased disposable income led to the expansion of the fashion industry’s consumer
base. Apart from this, by 2017, a dip in textile exports forced the big names to bring the middle
class within its fold; this has led to increased competition and production in the lawn season, the
products of which much in demand almost throughout the year. Due to this, several textile
manufacturers launched their brands in light of the fall in exports in 2017.
On the other hand, fashion brands lately have taken up societal causes in their social media
campaigns to widen their reach. The brand, Generation, for example, calls for inclusivity and is
known to showcase “real women” which aims to question the stereotypical standards of beauty.
Generation also used hashtag campaigns like #StepOutside, to push for a reclamation of public
spaces by women. Other brands like Zara Shahjahan called for the recognition of the labour
behind the fashion industry, the karigars and the tailors, under the #Imadeyourclothes campaign.
On the speculations of the campaign being a publicity stunt, the owner of Zara Shahjahan said
most of the labour in Pakistan is highly paid and claimed that tailors are paid PKR one to 1.5
lakh. Such tactics have helped popularise fashion brands among the middle class.
The PBF President expressed displeasure that the industry was not exploring the export potential
of the textile sector. In April 2021, the export value of the textile and clothing industry stood at
USD 1.337 billion, reflecting an increase of 231.17 per cent from USD 403.833 million in the
corresponding period the previous year. The growth has been attributed to the Economic
Coordination Committee’s approval to import duty-free cotton yarn until the end of June 2021.
The Pakistan Economic Survey 2019-20 records that despite a slump of -2.57 per cent in Jul-
Mar FY2020, textile exports grew by 4.52 per cent, and stood at USD 10460 million. In July, the
Lahore Chamber of Commerce & Industry President said that Pakistani fashion brands like
Maria B and Khaadi, have established themselves abroad, in the UK, US and Middle East,
thereby paving the way to explore the international fashion market.

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Oil and Gas Industry:
Pakistan is currently overcoming a severe energy crisis that has directly and indirectly affected
all sectors of the economy over the past decade thanks to an increase in its power generation
capacity. Pakistan generates its power from an energy mix that includes oil, gas (natural gas and
liquefied natural gas, LNG), coal, renewable sources (solar, wind and hydro energy), nuclear,
and biomass. Pakistan’s energy sector is heavily dependent on imported fuel (oil and LNG) and
will continue to rely on imports of both for the next 10-15 years.
Pakistan remains a net importer of refined oil because of the low capacity of domestic refineries
to process crude oil. Total refining capacity of Pakistan is 19 million tons, however, the capacity
could not be fully utilized owing to non-upgradation of refineries, technical and financial
constraints. In 2019, the country produced 4.3 million metric tons of crude oil, enough to meet
only 20 percent of the country’s total petroleum requirements. The remaining 80 percent was met
through imports of crude oil and refined petroleum products worth $15-$16 billion annually.
There are currently five large oil refineries running mostly on imported crude oil. In October
2018, Pakistan and Saudi Arabia agreed to build another refinery in Gwadar, Balochistan in an
attempt to reduce the country’s reliance on refined oil imports.
Natural gas contributes 38 percent of the country’s total primary energy supply mix. Total
domestic gas production has hovered around 4 billion cubic feet per day (bcfd) while domestic
demand is estimated at 6-8 bcfd. Thus, there is a natural gas supply-demand gap. Pakistan’s
natural gas production reached a peak in 2012, and since then, Pakistan’s production (from
existing fields) has started to decline and recent small natural gas discoveries are barely able to

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offset production declines. According to the Energy Information Administration, Pakistan holds
sizeable shale gas reserves and the Pakistani government has provided investment incentives for
shale gas development. Challenges to develop shale resources include complex geography,
environmental constraints, water resource constraints, security, and low natural gas prices in
Pakistan.

Given depleting natural gas resources (in existing fields), Pakistan started importing LNG in FY
2015 to meet growing domestic demand. Pakistan commissioned its first regasification terminal -
the Engro Elengy floating, storage, and regasification unit (FSRU) - at Port Qasim Karachi in
2015. The second LNG terminal started commercial operations in December 2017. With growing
demand of gas among private sector (power, cement, textile industry), Government opened up
LNG sector for private firms where they can import LNG for respective industry’s consumption.
In this regard, a third LNG terminal is underway and undergoing bureaucratic approvals.

Industrial Development in Pakistan

At the time of independence, Pakistan has inherited only 34 industrial units out of 921 industrial
units in subcontinent. They were cotton textile, cigarettes, sugar, rice husking, cotton ginning
and flour milling industries; and together they contributed only 7% of GDP and employed a little
over 26,000 employees.
Industrial development or history of industries in Pakistan can be divided into six phases:

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Phase 1 (1947-1957):
1. This phase started from 1947 ended to 1958. During this period, the country was newly
born and politically immature. During this 11-years period, 8 prime ministers came into
power. Not a single prime minister was strong enough to pursue the industrial policy
well.
2. During this period, the policy emphasis was on import substitution.
3. Government had established a committee to formulate industrial policy.
4. This committee emphasized on manufacturing industries, reduction of imports, and net
social and economic advantages to the country.
5. Pakistan Industrial Finance Corporation (PIFC) and Pakistan Industrial Credit and
Investment Corporation (PICIC) were established in 1948.
6. To create skilled labour, a Swedish-Pak Institute of Technology was established in 1955.
7. Pakistan Industrial Technical Assistance Centre (PITAC) was established in 1956.

Phase 2 (1958-1969):
1. In 1958, a military government of Ayub came into power in Pakistan and announces a
new industrial policy in 1959. This phase witnessed the massive industrial growth in the
country.
2. This industrial policy emphasis on private sector and the development of agro-based
industries.
3. During this period, the government gave emphasis on intermediate and capital goods, i.e.,
electrical, chemical, machine tools, etc.
4. Various types of funds were established to promote the industrial development in the
country.

Phase 3 (1973-1977):
1. During this period, a new democratic government of Bhutto came into power and adopted
the principles of mixed economy.
2. Government ruthlessly nationalized 34 industrial units belonging to the following basic
units:
a) Vegetable ghee and oil industries (26 industrial units)

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 b) Shipping industry
c) Iron and steel industries
d) Basic metal industries
e) Heavy engineering industries
f) Assembly and manufacture of motor vehicles
g) Tractor plants
h) Heavy and basic chemicals
i) Petro-chemical industries
j) Cement industries
k) Public utilities including electric generations, gas and oil industries.

3. The nationalized industries were put under the management of Board of Industrial
Management (BIM).
4. Pakistan Industrial Development Corporation (PIDC) was established.
5. Other reforms were taken by the government were:

a. Labor reforms
b. Abolition of bonus voucher system
c. Reduction of sales tax on imported items
d. Revision of import policy
e. Establishment of industrial units in less developed / rural areas.

Phase 4 (1977-1988):
1. A new martial law government by Zia came into power in 1977. The new military
government in 1977 announced the reversal of previous government’s nationalization
policy and introduced a new industrial policy.
2. The federal government offered for the transfer of shares of nationalized industries to
their former owners, under Economic Reforms Order 1978, and thus the new open way
for denationalization of industries.
3. Government announced tax holidays and revised import policy.
4. To boost private industrial development, following measures were taken:

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 a) Reduction in interest charges by banks to 12.5% on all fixed investments.
b) Removal of taxes on issuance of bonus shares.
c) Fixing standard rebates of excise duty on additional 17 items.

Phase 5 (1988-2008):
1. During the first half of this phase, i.e., 1988 to 1999 the country had faced worst political
conditions in the history of Pakistan.
2. Two governments had come into power for twice, i.e., Benazir’s Government and
Nawaz’s Government, and not even governed for more than three years. Therefore, the
industrial policy was never the top priority of those two governments.
3. Nawaz Sharif, however, lightly emphasized on infrastructural development in Pakistan,
but interrupted by the bloodless coup d’etat by Musharraf in 1999. Although Nawaz had
adopted considerable economic policies, i.e., deletion policy, deregulation policy and
privatization policy, which were also pursued by succeeding governments. Much of
these policies were influenced by IMF.
4. During the second half of this phase (i.e., 2000-2008), industries of Pakistan faced greater
influence of cheaper goods imported under WTO agreements.
5. The highlights of industrial policy of this phase are as below:

1. Deletion Policy: Although this policy was announced during Phase 4 in 1987
but also pursued by the governments in later phase. The objective of deletion
policy was to obtain self-reliance in engineering sector.
2. Deregulation Policy: Almost the whole industrial sector was exempted from
the requirement of government sanctions except:
i. Arms and ammunitions
ii. Security printing, currency and mint
iii. High explosives
iv. Radioactive substances
3. Privatization Policy: To reduce the financial burden imposed on government
and to reduce slack utilization of resources, privatization policy was adopted

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and is still continued. The main objectives of privatization were to improve
the overall performance of state-owned industries and to promote.

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