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The Ready-Made Garment Industry of Pakistan

Updated on December 16, 2010

Readymade garments

Ready-made Garment Industry Problems

The RMG (Ready-Made Garment) industry of Pakistan has expanded dramatically over the last four Decades. The RMGI of Pakistan established in 1970 since than it is working hard to make a prominent share in Pakistan's economy. In 1999-2000 the exports of Pakistani RMGI were US $ 772 million or 8.5% of the total exports.

Pakistan is an agriculture based country. Export of textile to different countries is the backbone of its economy. According to Pakistan's Economist Report textile exports in 1999 were $5.2 billion which rose to $10.5 billion in 2007. Cotton and cotton blended fabrics, yarn and fiber's export is the biggest genre of Pakistan. On the contrary to textile's foreign and indigenous market, ready-made garment industry is only holding a very limited market locally as well as internationally. Local demand of readymade garments during the past five years increased manifold due to increase in GNP, urbanization and population. Growing tailoring charges have induced the people to purchase readymade garments in larger quantities in the coming years.

Problems faced by the Readymade Garments Industry

With all opportunities and strengths at the back still Pakistan's ready-made garment industry is failed to develop a niche in local and foreign market. What are those problems garment industry is facing today.

i- Inappropriate Governmental policies:

One of the very important problems faced by not only garment industry but all other industries as well is: lack of conducive industrial policies, absence of foreign direct investment, insufficient export processing zones and no trade fairs inside and outside the country. These initiatives can become the main cause of export-led industrialization in Pakistan. Government should provide the advantage of duty-free raw material imports usable in the manufacturing of export products to encourage and accelerate such industrialization. Another concern is the proper and on-time implementation of policies and strategies. Rules and regulations that exist only on paper are meaningless if they are not duly and properly implemented. Bureaucratic complexities, corruption, political instability and lack of good governance are some areas which the Government needs to address in order to ensure the proper implementation of its strategies and policies. Infrastructure development is another area where the support of the Government is undeniable in a developing country such as Pakistan.

ii- Technological factors:

Rapid changes and development in technology has increased competition. To address to this fast pace of technology garment industry needs to learn and adopt new and innovative approaches. Pakistan is still far from it. The machinery that is being used for different operations is usually outdated and obsolete. Government should provide funds and loans to the owners of garment industries so that they can install new machinery which can perform tasks in easier and faster manner.

iii- Socio-cultural factors:

Though this does not directly influence the garment industry but on the long run its effects can not be minimized.

iv- Economic factors:

In the last two decades economic depression has been seen worldwide. Due to increased war on terrorism countries are forced to put lots of budget on the defense than on other sectors. A sudden downfall in the purchasing power of the general consumers has also been seen. Textile is the first main ingredient of Pakistan's economy. Internal political problems and instability is another cause of economic downfall. Poverty level, FDI (Foreign Direct Investment), and export are on fast decline. Many garment industries have been closed today due to all these factors.

v- Power Failure:

Power failure is one of the biggest problem garment industry is facing. Long duration electricity load shedding without any schedule; instable prices of electricity, per unit price of electricity raise after every few month; shortage of gas supplies in winter; increase rates of petroleum products; lack of CNG; as well as water shortage are some of the prominent causes of garment industry downfall in the lat two or three years.

Garment and textile industry of Pakistan suffered great losses in November, December and January this year. Though large industries have developed their own power plants (running on gas) but these are few. As a result of loss suffered by the garment industry they reduce the wages of employees.

vi- Frequent Price Fluctuations:

Create a serious problem for the industry, particularly for those who manufacture garments on orders. After announcing the budget in June every year government keep on raising the rates of raw materials, processing materials, auxiliary products and other products used in the processing. The industry owners can not make their own budget because it keeps on changing with price fluctuations.

vii- Lack of infrastructure:

Physical and organizational structure of Pakistan's garment industry is as worse as other systems. Infrastructure cannot be enhanced in a day it is a result of years of hard work but today most of the infrastructure is getting destroyed by the crisis of terrorism etc.

viii- Purchasing Power:

Consumer's purchasing power has declined in the lat few years. With frequent price fluctuations garment industry is forced to increase the price of their products which consumers are not willing to purchase. Even in foreign market Pakistan is facing severe competition with India, china and Bangladesh; these countries are offering high quality products at low prices because their economy is much more stable than Pakistan.

ix- Facts & Figures Regarding Production:

Although garment industry made a rapid growth till few years back but no organized data is available that can show the expansion or reduction in the growth of this sector. Firstly, most of the garment industries are not working on large scale; they are small industries working at their homes or in small rural places which are not even registered. Secondly, government has not made any statistics of their growth. Thirdly, many industries close each year and new ones develop but there is no stability except for few bigger names.

x- Research and Development:

In educational sector there is no trend towards researches. Lack of research-oriented attitude also leads to lack of improvement in the industry. New and innovative products are introduced by the garment industry of other countries but Pakistan is legging behind in this context.

With these problems the quality of the product has been deteriorated. Consumers on the other hand today are more aware of the product quality and they do not waste their money on poor quality products. To complete the process of production, industries try to cut down their investment on product promotion, publicity and advertising; they are firing many employees to reduce the budget, this has in turn increased poverty rates.

Pakistan has lots of potential and the raw material for the garment industry–the fabric- is also of superior quality but the environment to develop and progress is not compatible.


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    • profile image

      Faran 4 years ago

      I am part of textile industry from the last 2 years. Last 1 year i am helping companies to export fabrics in large quantities but when i start to make the garment from the same fabrics. Which is using by big Garment making branded companies in europe, i did not a good response from local market. Its means we dont choose quality we only buy without any thinking.

      Any one who like to have info or share ideas could email me at in

    • profile image

      FARRUKH REHMAN 5 years ago

      Dear All,

      I am a student of Middlesex University London, I am currently doing my Dissertation. Can anyone help me in getting the accurate data for current pakistan Readymade garment industry. Most of the data i found is of export is there anything available which can give me the highlight of current paksitan retail in Readymade garment industry, the size of the industry. My project is an Entrepreneurship and it an End to End process. I am not getting the data for anything specially on MENS FASHION LINE..... I will appreciate if anyone can help me as i need to plan my trip to pakistan to collect the data and need to do some customer surveys as a part of my Plan

    • profile image

      MOHSIN MALIK 5 years ago


    • echelon profile image

      echelon 5 years ago

      Nice article

      But for "i- Inappropriate Governmental policies" i would like to say that sbp provides Export Refinance (ERFS) Facility to the exporter through commercial banks.

      avarge lending rate (interest/ markup ) is around 20 to 24% rite now. but under ERFS is 11% . Once the exporter makes the shipment and export proceeds are received in Pakistan SBP through commercial bank return the 2.5% of interest paid to the exporter. Which makes interest rate for the exporter effectively 8.5%. that is approximately 1/3 of the commercial interest rate. Resulting in huge saving to the exporter in terms of borrowing cost.

      Further income tax is only 1% of the export proceeds.

      Additionally Duty drawback is also provided to the exporter for indirect tax (Sales tax, Excise Duty and Custom Duty) after the exporter meets certain conditions.

      having said that ur article seems gud but the govt provides many incentives to the industry specially to the exporter u need to account for it. but u have rightly pointed out that the govt departments need to perform their role more effectively and efficiently

    • gulnazahmad profile image

      gulnazahmad 6 years ago from Pakistan

      There are many reasons Mohsin but in present days power crises is one of the major reason, many small and even some big industries closed just because of power crises.

    • profile image

      Engr Mohsin 6 years ago

      Well i think the downfall in our industries is due to power crises and second is that a professional needs to have a strong reference if he is willing to do a job otherwise this is quit difficult to get a chance and our

      cream is going to abroad

    • profile image

      umer 6 years ago

      Gud info.....

    • gulnazahmad profile image

      gulnazahmad 6 years ago from Pakistan

      Kamran Pakistan industry is full of potential and world class designs but there is only need of good marketing and improvement in infrastructure.

    • Kamran100 profile image

      Kamran100 6 years ago

      good collection of design, pakistani industry is world class production, well done

    • profile image

      MD.ABU ZUBAER 7 years ago

      this is a information based topic.I like it

    • gulnazahmad profile image

      gulnazahmad 7 years ago from Pakistan

      Thats why they don't purchase new machinery and soon their machinery get obsolete and they get out of the competition in the world market. I agree

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      Dany 7 years ago

      What goes around comes around. It is a typical Pakistani mindset that the owners of these businesses instead of sharing their earnings with the community by modernizing the manufacturing processes, infrastructure and keeping up to date with the changing global trends, instead, went for the short term to put everything in their own pockets only : buying bigger cars, building bigger houses etc. They never hedged themselves against the potential risks, and showed limited foresight capacity of building a strong foundation for a sustainable industrial base in the long term. They deserve to be out witted by competitors, as the badmash culture prevalant in Pakistan doesn't work in international trade. If you are not competitive you are out, and no special favors, or gunda gardi can get you what you want

    • gulnazahmad profile image

      gulnazahmad 7 years ago from Pakistan

      Thanks for reading and your comments too:-)

    • suhanaasif profile image

      suhanaasif 7 years ago

      nice article:)

    • gulnazahmad profile image

      gulnazahmad 7 years ago from Pakistan

      Thanks for reading it hopefully it will help you in some way:)

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      saniya 7 years ago

      we have unlimited resources that need to be utilized especially land, but we don't have experts in every field.

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      elia_k 7 years ago

      Our govt fails to plan ahead of time they use to decide when the problem is under their nose. And then they don't know what to do.

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      fareeha21 7 years ago

      As far as I think we are not standardized we are not bothered about the standards of work. We need to know that unless we are following the world standards and prefer to concentrate on quality we cannot develop or solve our problems.