Textiles and Garments: Moving Up the Value Chain

Textiles and Garments: Moving Up the Value Chain

Garments manufacturing is the least energy and capital-intensive industrial activity and thus, resonates with Pakistan’s resource endowment to generate economic growth and employment. Despite, its major contribution to Pakistan’s exports, its immense potential is not being realized. An important reason for the poor growth of the garments sector is that Pakistan exports a limited number of products and barely (if at all) competes in those products that account for about 60 percent of the world trade. To fully realize its potential, garments manufacturing must move up the value chain.

This research project has been conducted in two phases:

Phase I examines trends and structural change concerning textile and garment exports, the barriers to garments sector growth and the actions taken by industry leaders and firms to improve resource management and competitiveness. 

Phase II emerged in response to strong stakeholder demand following the findings of Phase I. After attaining GSP+ status by the European Union (EU), Pakistani exports to EU markets enjoy lower tariffs. Given this development, Phase II focuses on accelerating productivity growth and the move to higher value garments manufacturing. In addition to documenting the Punjab government's efforts to improve this sector, Phase II shares insights on the garment sector from interviews with randomly selected garment manufacturing firms in Sialkot and Faisalabad, Punjab, as well as firms studied for Phase I. These interviews gather perspectives from firms on issues such as the impact of the GSP+ status, international collaborations, barriers to relocating a garments industrial city and paths to higher productivity.

Project Authors
Ijaz Nabi — Pakistan Country Director, International Growth Centre
Naved Hamid — Professor, Lahore School of Economics
Rafia Zafar — PhD Candidate in Economics, Fordham University


The Textiles and Garments Sector: Moving Up the Value Chain (Phase I
September 2014

Read the policy brief
Read the report

The Textiles and Garments Sector: Moving Up the Value Chain (Phase II)

(Policy brief and report forthcoming)


Moving Pakistan up the value chain: Opportunities in textiles and garments
The International Growth Centre | 29 July 2015 | Hina Shaikh