Improved quality is the key to survival for Pakistan's textile industry once quota barriers are lifted in January 2005 a new study has warned.

Textile exports, which make up 67 per cent of Pakistan's total exports, will face tough competition from China, Thailand, Hong Kong and Bangladesh when the Multi-Fibre Agreement expires at the end of December 2004 the Karachi Chamber of Commerce & Industry says.

In its research on the implications of various World Trade Organisation accords, the study cautions: "Potential growth of Pakistan's exports depends on the ability of producers to improve the quality of their exports, improvement in productivity and restructuring of the domestic industry."

It also study advises companies that there will be increasing pressure from foreign buyers to comply with social, labour, health, hygiene and environmental standards - and that non-tariff barriers will also be in force after the end of the quota regime.

In its conclusions, The Karachi Chamber of Commerce & Industry calls on the government should provide incentives to encourage foreign companies to locate their manufacturing bases in Pakistan.

It also asks the government to ensure a strong network of anti-dumping and countervailing duties to guard against cheaper imports.

Pakistan's textile exports grew 24 per cent in the last fiscal year to $7.15 billion, with most growth seen in garments, knitwear and bedwear products.