Pakistan is poised to spend $200 million on second hand textile machinery from the United States instead of India, the country's Commerce Minister, Abdul Razak Dawood, has revealed.

The minister said that a final decision from the Federal Textile Board (FTB) was expected in the next few weeks and that he believed the US machinery would be vital to his country's textile firms continuing to make world class products.

He added that the machinery had become available in the US as a result of many textile producers moving to Mexico.

Meanwhile, imports of textile machinery dropped to $28m in December from more than $40m in November as the modernisation wave sweeping the industry threatens to grind to a halt.

The slump is being blamed on uncertainty in the industry following the September 11 attacks, the worldwide economic slowdown, and the threat of military action between Pakistan and India over the disputed state of Kashmir.

Textile exports have stagnated in the last six months with growth of less one per cent to reach $2.85 billion.

The US-led war against Afghanistan and resulting business uncertainty is estimated to have cost Pakistan between Rs140 billion to Rs265 billion in gross domestic production and caused up to 120,000 workers, many in the textile industry, to lose their jobs.