Pakistans weaving industry enjoys one of the highest modernisation levels.With 67% of its weaving capacity is constituted by shuttleless looms, Pakistan is second only to Europe which has the worlds highest degree of loom modernisation at 76.8%. China, despite its rapid advances in the world markets, has comparatively more archaic units. Just 6.2% of the looms in China is shuttleless.
Low levels of modernisation in the Indian weaving industry is due to limited investment in technology upgradation by the small scale industry, said the report. The small scale sector, the predominant sector in the weaving industry, can invest only limited funds in technology upgradation and, therefore, a major bulk of the industry uses antiquated machinery, stated the report. Besides, excise exemptions enjoyed by the unorganised units till a couple of years ago had given them an unfair advantage over the larger units, leading to their widespread sickness and closure.
Given the emphasis on exports in the post-MFA era, cotton yarn spinners also face difficulties. According to the report, the profitability of the cotton yarn industry is constrained by the hank yarn obligation, under which over 25% of the production for domestic sales has to be sold in the hank form to the handloom sector at prices significantly lower than open market prices.