In 2017, Pakistan’s share in world exports of garments was a meager 1.10 per cent.
The primary reason for this poor performance is the narrow export base, which is tilted towards low value-added unsophisticated items. The top six products exported by Pakistan account for 52 per cent of Pakistan’s exports, but only 20 per cent of total world garment exports.

World demand has been shifting to manmade fiber, which Pakistan has been unable to exploit. In addition, Pakistan’s garment exports are not well diversified in terms of destinations. Almost 88 per cent of the country’s garment exports are destined for the European Union and the United States.

Pakistan faces higher production costs and lower productivity compared to its peers. High production costs are in the form of import duty on cotton and manmade fibers, high energy tariffs and minimum wage. This has led to fierce competition with other low-wage competitors leading to small export orders for Pakistan.

Unfavorable tariffs restrict market access. Its currency in the recent past was overvalued with respect to the dollar, making exports less competitive against China, India, Bangladesh and Vietnam. Other impediments include poor access to credit, delay in the payment of tax refunds, low technological adoption, and time-consuming export procedures.