Pakistan’s Apparel Exports Experiencing Rapid Growth, Says Ambassador Masood Khan
By Elaine Pasquini
Washington: “Pakistan’s apparel sector is undergoing a profound transformation and is positioning itself for robust export growth,” Masood Khan, Pakistan’s Ambassador to the United States, testified in a March 11, 2024, public hearing at the United States International Trade Commission (ITC) on the export competitiveness of the apparel industries in Bangladesh, Cambodia, India, Indonesia and Pakistan in the US market.
The investigation is being conducted by the ITC at the request of the United States Trade Representative and the Commission is required to submit its report by August 30, 2024.
The ITC report will make a comparison of the market share of these five suppliers and analyze changing patterns in market share. The report would also take into account major factors of competitiveness, including trade, industry structure, price and costs, product differentiation and reliability.
Highlighting that the textiles and apparels sector contributed around 60 percent to national exports and 24 percent to industrial value-addition, the ambassador pointed out that the sector has the unique distinction of having mature, intensive backward and forward linkages which translate into a vertically integrated value chain.
He also noted that textiles and apparel were generating 40 percent of the total industrial employment and, importantly, were a significant employment generator for the Pakistan female workforce.
The ambassador pointed out that Pakistan’s strength in the textile and apparel sectors was anchored in the local supply of major input materials, availability of a skilled and competitive workforce, industrial integration, vibrant and dynamic entrepreneurship and commitment to meeting quality and Environment, Social and Governance (ESG) standards. “These factors,” he said, “are underpinned by the government’s aggressive measures to improve efficiency, regulatory environment and ease of doing business.” He projects the apparel sector will meet the sustainability, competitiveness and compliance to ESG standards.
Noting that the United States was the largest export destination for Pakistan, Khan said: “Textiles and apparel constitute around 85 percent of Pakistan’s total exports to the US.”
“Pakistan has a 3.3 percent share of the US market in the textiles and apparel segment; however, all the exports of apparel products are subject to applicable most-favored nation tariffs of up to 38.3 percent as Pakistan does not enjoy preferential access to the US market,” he added.
Pakistan is the fifth largest cotton producer in the world and the third largest producer of Better Cotton globally, Ambassador Khan told the ITC. Better Cotton is a non-profit, multistakeholder governance group that promotes better standards in cotton farming and practices across 22 countries. In addition, Pakistan promotes cultivation of organic cotton to reduce greenhouse gas emissions. Pakistan is making concerted endeavors to increase cotton productivity and transition towards sustainable development.
Also noting the resilience of the textile and apparel sectors especially in wake of COVID-19, Ambassador Khan pointed out that Pakistan recorded textiles and apparel exports of US $19.3 billion in the financial year 2021-22, which increased by 54.4 percent as compared to US $12.5 billion in previous years. This growth, he said, was driven by apparel exports which increased by 69 percent to US $9.03 billion in the financial year 2022 from US $5.35 billion in the financial year 2020.
“Under the Net Zero Pakistan Initiative, leading apparel companies are committed to accelerating the transition to sustainability and delivering Net Zero goal by 2050,” the ambassador reported.
“Because of massive disruptions in supply chains in the last two years, Pakistan, like other leading exporters of apparel, witnessed a declining trend,” the ambassador said. “However, right now, we are in the recovery mode of rapid growth.”
Pakistan has followed a liberal investment regime that offered a conducive environment to attract foreign and local investors, he continued, adding that Pakistan attracted high-value-added, export-oriented and resource-efficient investments through increased integration with global value chains.
During the last few years, the sector has attracted approximately $5 billion of fresh local investment for expansion of the textiles and apparel manufacturing chain, including imports of around $2.2 billion worth of new machinery from 2019 to 2023, Ambassador Khan said. The sector, therefore, has the capacity to ramp up the scale of apparel manufacturing even further.
“Individual companies in Pakistan are adopting advanced traceability technologies to consciously champion supply chain transparency in alignment with global requirements,” he said.
The ambassador related that Pakistan’s customer base was diverse with many prominent US enterprises and retailers, most of them Fortune 500 companies, already sourcing their products from Pakistan.
“Pakistani apparel exporters look forward to reinforcing the strong historical trade relations between the two countries,” Ambassador Khan concluded.
(Elaine Pasquini is a freelance journalist. Her reports appear in the Washington Report on Middle East Affairs and Nuze.Ink.)
