Ahmed Khan Malik

The Sindh government will develop a modern infrastructure in the Karachi Garment City to make it more vibrant for increasing exports. As per the plan, climate-friendly industrial units as well as water recycling and treatment plants would be established in the city spread over 300 acres, reports WealthPK. The city is an exclusive industrial estate dedicated to the production of value-added textile products. One of the principal objectives of the city is to effectively oversee and guide the expansion and modernization of infrastructure in the textile sector, thus greatly enhancing Pakistan's earning potential, creating significant employment opportunities and encouraging skill development at all levels. The city has a cluster of sewing and stitching units grouped together to produce specialized garments for export and provide an opportunity to the small and medium entrepreneurs to develop value-added clothing and accessories. The stitching units operate under one roof or in one location, sharing common facilities such as training centers, import warehouses, water treatment plants, transport, and logistics services. Talking to WealthPK, Rauf Mushtaq, Director of Karachi Garment City Company, said the city was established about 15 years ago, playing a key role in enhancing revenues and exports. The city now needs improvement and modernization to effectively compete rivals in the international textile market. In order to make the local products competitive in the international market, the government decided to develop the city on the modern lines.

There has been no significant improvement in Pakistan's apparel exports, which have been stagnant for many years. The primary reason for this is the narrow export base, and even this narrow base is biased towards low value-added, unsophisticated items. The top six products exported by Pakistan account for 52.0 percent of exports, but only 20.0 percent of the total world garment exports. The international demand has been shifting to man-made fiber (MMF), which Pakistan has been unable to exploit. In addition, Pakistan's garment exports are not well-diversified in terms of destinations, as almost 88.0 percent of garment exports are destined for the EU and the US. The underperformance in exports can be attributed to a number of factors. It faces higher production costs and lower productivity compared to its peers. The high production costs are in the form of import duty on cotton and MMF, high energy tariffs and minimum wage (supply constraint). This has led to a fierce competition with other low-wage competitors, thus leading to small export orders for Pakistan (demand constraint). Rauf said the government was making efforts to enhance exports, as it was the main source of foreign exchange earnings, which Pakistan needs badly at the moment. Garment exports are the key area and modernization of Karachi Garment City is part of a holistic approach of the government to increase exports.

Credit: INP-WealthPk