MAJOR IMPORTS &

EXPORTS OF PAKISTAN
GROUP MEMBERS
LAIBA KHAN
NIMRA RAUF
SYED ALI HAIDER RIZVI
TAHREEM ZAHRA
SADAF OMAR KHAN
ALI BIN SAEED
 ADAM SMITH ABSOLUTE ADVANTAGE
THEORY
• In theory of absolute advantage Adam Smith argued with Mercantilism and suggested that
countries differ in their ability to produce goods efficiently. The theory suggests that a country
should specialize in producing goods in areas where it has an absolute advantage and import
goods in areas where other countries have absolute advantages
 WHAT IS IMPORT?

• An import is a good or service bought in one country that was produced in another. Imports and
exports are the components of international trade. If the value of a country's imports exceeds the
value of its exports, the country has a negative balance of trade, also known as a trade deficit.
 MAJOR IMPORTS IN PAKISTAN

• Mineral fuels including oil

• Electrical machinery, equipment
• Machinery including computers
• Iron, steel
• Animal/vegetable fats, oils, waxes

• Plastics, plastic articles

• Organic chemicals
• Vehicles
• Cotton
• Oil seeds
 WHAT IS EXPORT?

• Exports are goods and services that are produced in one

country and sold to buyers in another. Exports, along with
imports, make up international trade.
 MAJOR EXPORTS IN PAKISTAN

• Rice
• Mangoes
• Oranges
• Cotton
• Surgical Instruments
• Leather Goods
• Furniture
• Football
• Sea Food
MAJOR BARRIERS (TARIFF AND NON-TARIFF

•Countries put up barriers to trade for several reasons. Sometimes it is to protect their own
companies from foreign competition.
•OR
•Trade barriers refer to restrictions set by the government in order to regulate foreign trade and
investment. For example – a tax on imports is a trade barrier.
•The most common barrier to trade is a tariff—a tax on imports. Tariffs raise the price of imported
goods relative to domestic goods (goods produced at home). Another common barrier to trade is a
government subsidy to a particular domestic industry.
 MAJOR BARRIERS (TARIFF AND NON-TARIFF

• Tariff Barriers: A tariff is a tax put on goods imported from other countries. The effect of a tariff is to raise the price
of the imported product. It makes imported goods more expensive so that people are more likely to purchase lower-
priced items produced domestically.
•common Types of Tariffs
•There are several types of tariffs and barriers that a government can employ:
 Specific tariffs
 Ad valorem tariffs
 Licenses
 Import quotas
 Voluntary export restraints
 Local content requirements
MAJOR BARRIERS (TARIFF AND NON-TARIFF

• Nontariff Barriers: Any barriers other than tariff. It is meant for constructing barriers for the free
flow of the goods. It do not affect the price of the imported goods. It affects the quality and quantity
of the goods.
•Embargo
• A total ban on imports or exports of a product.
•import quota
• A limit on the quantity of a certain good that can be imported.
•buy-national regulations
• Government rules that give special privileges to domestic manufacturers and retailers.
•Exchange controls
• Laws that require a company earning foreign exchange (foreign currency) from its exports to sell the foreign
exchange to a control agency, such as a central bank.
 PORTER’S DIAMOND THEORY

• In 1990 Michael Porter did intensive research and published the results that help understand the
competitive advantage that nation posses due to certain factors available to them and other fail in
the international market. Porter showed four broad attributes:
PORTER’S DIAMOND THEORY
 TEXTILES (COTTON)

•The cotton and textile industries play a dominant role in exports; cotton accounts
for 55 percent of the country's export earnings, and Pakistan has a 14% share of the
world's cloth exports.
 FACTOR ENDOWMENTS

 Cotton spinning is perhaps the most important segment in the Pakistan textile industry with 521 units
installed and operational.
 Abundance of raw material is a big advantage for Pakistan due to its beneficial impact on cost and
operational lead time.
 The Textile Institute Manchester, UK's local section for Lahore, Pakistan has played an extensive role in
contributing to development of skill improvement and technology sharing through its various training and
latest knowledge sharing platforms
 Cotton is a major crop of Pakistan after wheat, and it occupies the largest area in Pakistan compared to
other crops.
 Nearly 26 percent of farmers grow cot-ton, and over 15 percent of total cultivated area is devoted to this
crop, with production primarily in two provinces.
 DEMAND CONDITIONS

 Cotton production ac-counts for 4.5 percent of the value added in Ag GDP and 0.8 per cent of GDP.
 It serves as the raw material for the textile industry, the country’s largest agro-industrial sector , employs
17 per-cent, earns 60 percent of foreign exchange and contributes 8.5 percent to GDP.
 This shows that that there is a high demand of cotton in domestic industry leading the industry to achieve
 economies of scale
 increased quantity
 better quality and
 attain sophisticated buyers.
 RELATING AND SUPPORTING INDUSTRIES

 The main raw material of textile and clothing industry is cotton.

 The textile industry in Pakistan achieves cost advantage in the segment of apparel as well as home textiles
with the help of unending supply of local staple cotton which have been domestically produced.
 Textile exports earn as much as 57.4 percent of Pakistan’s entire export earnings, the number of textile
mills in Pakistan increased from 3 to 600. In the same time period, spindles increased from 177,000 to 805
million.
• So this eventually creates advantage for the downstream industry.
 FIRM STRATEGY, STRUCTURE, AND RIVALRY

 Diversification
• Expanding into a diverse market & product is being considered as a prudent national strategy.
 Cost Competitiveness
• Enhancement of price competitiveness by increasing the productivity and decreasing the cost
with the production efficiency.
 Sustainability
• Pakistan investing in sustainable practices, ensure employee safety standards, have quality checks
in place and so on, as well as following global policies and practices to ensure a positive image
and to ensure a distance from scandals.
 FIRM STRATEGY, STRUCTURE, AND RIVALRY

 Domestic rivalry like other crops puts pressure in its production leading its producers to
develop a comparatively better ways in innovating better ways of production.
 In the past, cotton production and marketing was subjected to many public policy interventions.
The Cotton Export Corporation was phased out and cotton economy was freed in the 1990's.
With the advent of trade liberalization, most of interventions have declined.
 The results of static analysis showed that farmers are earning more profit at world price of
cotton than at domestic price of cotton. It was concluded that cotton crop was underpriced in the
local market and farmers are in a cost-price squeeze situation.
 CHALLENGES FACED BY PAKISTAN

These are following challenges faced by Pakistan:

• Lack of Technology
• Power/ Energy Shortage
• Labor Issues
• Lack of Govt. interest
• Less interest of investors in this industry
• Security risks
• Lack of infrastructure / Facilities
 THANK YOU

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