Pakistan's textile exports to the EU have grown considerably since January 2014, which was when the country got the GSP Plus status. This is true especially of textile mills that produce knitwear and garments. They have significantly increased shipments to the EU in the last 11 months. However, exports of bed wear and cotton cloth have dropped.

Under the scheme, Pakistan enjoys of zero or low import duty structures. Pakistan’s textile exports to the EU increased 21.4 per cent in the first eight months of 2014 compared to the same period of the previous year. During July to October 2014, overall knitwear exports jumped by 25 per cent compared to the same period of the previous year. Ready made garment export increased by 10 per cent in the same period. But energy shortages, appreciation of the rupee, security challenges and delay in sales tax refunds are having an impact. Sales of some garment exporters have remained stagnant despite getting all the advantages of the duty preference.

Positives are a relative stability in exchange rates in recent months, strong macroeconomics and declining oil prices. Pakistan’s textile exports constitute more than 50 per cent of total overseas sales.