The Study is part of the PBC’s SME outreach program in which it works in collaboration with the EDB & respective sector associations in the engineering sectors which have some export footprint. The major opportunities and challenges in export markets are identified and policy recommendations developed to help each sector achieve its export potential.

This study, analyzes the competitiveness of Pakistan’s aluminum utensils sector across the production, trade, and export value chains. The study evaluates market dynamics, the product mix, labor and raw material dependencies, and export potential in key international markets. It further seeks to identify structural and policy-related challenges faced by the industry and recommends measures to improve quality standards, promote technology upgradation, support SMEs, and facilitate a shift towards value-added and an export-oriented growth.

According to the All-Pakistan Aluminum Utensils Manufacturers Association (APAUMA), the total number of units engaged in the manufacture of aluminum utensils is estimated at between 500 & 600 with an annual production of 140,000 tons. The sector is estimated to provide employment to about 25,000 workers. Most units are medium to small sized with only a few units employing between 500 – 600 employees.

Top 10 Global Exporters of Aluminum Utensils

The global exports of aluminum utensils increased from $4.53 billion in 2015 to $6.40 billion in 2024, recording a CAGR of 0.04 percent during this period. China ranks first, with its exports rising from $2.32 billion in 2015 to $3.91 billion in 2024. Meanwhile, Pakistan was ranked 23rd, with exports increasing from $25.97 million in 2015 to $26.76 million in 2024.

Top Global Exporters of Aluminum Utensils

Opportunities for Enhancing Exports

Based on industry discussions and review of secondary data, the aluminum utensils sector in Pakistan presents several important opportunities, primarily driven by export presence, and unmet international demand for specialized aluminum utensil products.

• Current exports include aluminum cookware, anodized products, and metal-finished utensils.
• Key export markets are the UAE, Saudia Arabia, the UK, Belgium, France, the USA, Afghanistan, and some European countries.
• There is potential to expand into regional markets such as Bangladesh, Sri Lanka, and selected Central Asian countries.

Challenges

1. Limited Access to Technology and Finance:

Most firms lack affordable financing for machinery and automation, keeping production labor-intensive; reducing productivity, and leading to increasing quality inconsistencies. Manufacturers are also hesitant to use bank financing due to religious considerations and collateral issues. This limits access to support programs like the SBP’s TERF.

2. A Developing shortage of Skilled Labor:

The sector suffers from a growing shortage of skilled labor. Existing workers rely on outdated machinery and traditional methods, while younger workers avoid the physically demanding work, leading to a gradual loss of critical skills.

3. Limited Research & Development (R&D):

R&D receives minimal attention, with only 5–6% of manufacturers investing in innovation or monitoring global demand patterns. Most firms prioritize operational costs over product development, resulting in low innovation and reliance on copying large firms’ designs.

4. Weak Institutional Support and Service Delivery:

Despite contributions to social security schemes; healthcare and welfare services for workers remain inadequate, increasing operational costs and weakening trust between industry and government.

Recommendations

1. Enhancing Product Variety and Innovation: Industry needs to modify existing products and introduce advanced varieties of pressure cookers, anodized, and die-cast aluminum utensils to meet global demand for healthier and more durable products.

2. Encouraging Technological Upgradation: Promote automation in family-owned businesses, replace old machinery with environmentally friendly equipment, and improve production efficiency.

3. Promoting Export-Focused Growth: Focus on innovation aligned with international demand and increase the share of production dedicated to exports.

4. Limit Export of Recycled Aluminum Ingots: Restrict export of aluminum ingots in primary form to ensure availability for domestic manufacturers while allowing imports intended for re-export.

5. Upgrading Common Facility Centers (CFCs): Improve technology and machinery at CFCs, introduce circle-cutting facilities, and provide access to advanced tools for standardized production.

6. Skilled Labor Development: Establish vocational and technical training programs focused on modern production techniques, machinery operations, and safety standards.

7. Market Access and International Exhibitions: Support participation in TDAP and single-country exhibitions, organize B2B meetings, and provide guidance for visas and marketing in international markets.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 100+) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk

Despite past capabilities and current technical talent, the electronics sector in Pakistan remains underdeveloped, fragmented, and uncompetitive. The paper argues that Pakistan must shift its focus from mainstream hardware manufacturing — where economies of scale and global dominance by players like China pose steep barriers — toward high-skill, IP-driven domains such as electronics design and embedded systems. The brief also highlights untapped opportunities in two-wheeler automotive electronics, residential power electronics, and EV-centric component design, where market alignment and existing capabilities can be leveraged with modest policy support.

The brief reviews the National Electronics Policy, the Pakistan National Semiconductor Plan (PNSP), and the Semiconductor Policy and Action Plan (SPAP), outlining how they envision state intervention in training, R&D, international collaboration, and strategic infrastructure. It also offers a comparative analysis of past global success cases — notably Taiwan and India — and recommends Pakistan adopt a tailored, design-first strategy rather than capital-intensive fabrication ventures.

Through a close examination of the automotive and consumer power electronics sectors, the brief identifies structural weaknesses — from lack of certification infrastructure and international market access to outdated production technologies and poor trade facilitation — and presents targeted, realistic solutions.

The brief offers six key recommendations:

1. Develop public-private shared manufacturing facilities (“Factories-for-Hire”) to support white-label electronics production
2. Upgrade the National Institute of Electronics into a design-focused Center of Excellence under PPP mode
3. Establish a national semiconductor task force, with international facilitation offices to connect to global value chains
4. Promote electronics design houses, especially in chip and PCB design, with grant-based startup support tied to fundraising success
5. Invest in certification labs and streamline access to international compliance pathways for both electronics and automotive products
6. Replicate the smartphone manufacturing policy approach to scale product complexity gradually across the electronics sector

The paper positions electronics not just as an industrial opportunity, but as a strategic pillar of Pakistan’s innovation economy — one that requires targeted state support in its upstream stages, but whose downstream competitiveness must ultimately be driven by the private sector.

The PBC is a private sector, not-for-profit business advocacy platform set up in 2005 by 14 (now 100) of Pakistan’s largest businesses. PBC’s evidence-based policy research supports reforms that enhance Pakistan’s economic potential, industrial competitiveness, and ability to generate employment and exports.

While startups in Pakistan have demonstrated entrepreneurial resilience and attracted foreign interest, their long-term growth is threatened by chronic undercapitalization, regulatory uncertainty, and an absence of credible exit pathways. Drawing on stakeholder interviews, policy analysis, and international models, the paper offers a diagnostic of the capital formation environment—how capital is raised, structured, and recycled—and why it has failed to take root in a sustainable way.

Key barriers explored include the near-total absence of domestic institutional participation, limited legal structures for pooled capital, procedural friction between regulatory bodies, investor trust deficits, and a missing mergers and acquisitions (M&A) and public exit landscape. The paper examines why family offices, banks, corporates, and pension funds have remained passive, and why attempts at regulatory facilitation have failed to convert legal allowances into operational clarity.

The paper also evaluates the promise and limitations of the Pakistan Startup Fund (PSF), arguing for its integration into a larger fund-of-funds architecture. It presents a set of actionable policy recommendations to activate domestic capital, streamline regulatory processes, restore investor confidence, and enable meaningful exits through IPO and M&A reforms.

At its core, the paper contends that the challenge of capital formation for startups is not niche—it reflects broader investment bottlenecks in Pakistan’s economy. Fixing it is essential for inclusive innovation and economic competitiveness.

The PBC is a private sector, not-for-profit business advocacy platform set up in 2005 by 14 (now 100) of Pakistan’s largest businesses. PBC’s evidence-based policy research supports reforms that enhance Pakistan’s economic potential, industrial competitiveness, and ability to generate employment and exports.

As part of this study, the PBC conducted secondary research of available data and supplemented it with interviews/field visits with major firms operating in Pakistan in this category. The study identifies the opportunities and challenges in the aluminum utensils sector and proposes a set of policy recommendations aimed to increase exports of Aluminum Utensils from Pakistan.

Global exports of aluminum utensils registered a growth of 79.2% between 2012 and 2021, increasing from USD 4.1 billion in 2012 to USD 7.3 billion in 2021. China is the largest exporter of aluminum utensil products having a share of 55% in total global exports in 2021.

Pakistan ranked 24^th in the global aluminum utensils exporters list in 2021. Despite numerous constraints, Pakistan has witnessed a growth of 28% in aluminum utensils exports over the past five years. Almost 40% of the total aluminum utensils exports were destined for the UAE and Saudi Arabia.

Pakistan’s aluminum utensils sector presents an opportunity for growth but this growth is hampered by factors primarily related to informal raw material-procurement, shifting demands from aluminum die-cast to iron die-cast, high manufacturing costs, lack of funding by the government, irregular supply of raw material, payment issues, absence of operational Common Facility Centers and lack of testing laboratories.

Major Findings:

Raw material used in the sector is imported
Almost 90-95% of raw material used by this industry is imported, this adds to the working capital requirements of the manufacturers. Additionally, Pak-Afghan border is also used to procure aluminum in the secondary form such as motor scrap, auto parts, foils, etc. This route is not only supplying raw material to the aluminum utensils industry but also to the auto-parts industry and fan industry. However, supplies are erratic and subject to disruptions depending on the state of Pakistan- Afghanistan relations.

Shifting Global demand from Aluminum die-cast to Iron die-cast
Global trends show that cast iron utensils are gaining popularity. Reasons for this are the attributes associated with cast iron such as health benefits and variations in color and enamel coating.

With automation, the number of manufacturing processes reduce but cost increases
The high-pressure die-cast manufacturing method reduces the processes involved in production of utensils from 15-16 processes to only 6-7 processes. This increases the output per day ensuring good profit margins for the producers.

Not much attention is being given to Research & Development
Not much attention is given to research and development by the local manufacturers, this leads to a lack of innovation. Cookware is a low-cost item and hence manufacturers prefer investing their resources on other factors such as electricity, labor retention, taxes etc., rather than on research and development. Only 5-6 percent of local manufacturers invest in innovation. The remaining industry copies the innovation made by these large firms.

Manufacturers are reluctant to avail financing facilities from banks.
Most manufacturers stated that owing to religious reasons, a majority of the industry is reluctant to avail financing schemes offered by banks. Moreover, banks are also reluctant to give loans to SMEs in the absence of quality collateral.

Lack of funding by government in the Aluminum Utensils sector
There is a lack of funding in the aluminum utensils sector from the government which has hindered sector’s growth. Non-availability of high-quality machinery in the common facility centers means SME exporters are unable to manufacture as per the demand of the quality conscious markets.

Tonnage of exports has not increased
Major reason for decrease in quantity of aluminum utensils exports is the rise in prices of the finished goods which has led to increased value but decreased quantity. Additionally, world is also witnessing a global recession due to which consumption patterns have changed and this has impacted the sales of aluminum utensils globally.

Aluminum utensil products from Pakistan are mostly exported on credit
Aluminum utensil products manufactured in Pakistan are not price competitive globally. Hence, to incentivize the buyers abroad, manufacturers in Pakistan export their products on credit which allows payment to be made on a consignment basis.

Recycled Aluminum ingots are exported rather than being sold to domestic industries
Recycled aluminum ingots produced domestically are not supplied to the local industry and are instead exported, major reason being higher refunds given to exporters by the government. This creates a shortage of raw material in the local market for domestic manufacturers.

Extensive aluminum scrap burning to extract aluminum ingots is not environment-friendly
The burning of aluminum scrap to convert it to ingots has impacted the air quality index in Gujranwala. However, if SMEs start investing in SOPs to minimize environment pollution, it will increase the cost of production.

Export payment from the African region has been impacted due to FATF
Currently, the Dubai-channel is used for payments as direct payment issue has been faced from the African countries owing to FATF compliance issues. Money is paid in cash at the Dubai office which is then transferred to Pakistan through the Telegraphic Transfer (TT) route.

Common Facility Centers (CFCs) lack operational capacity
CFCs that are available lack operational capacity which is one of the major reasons for slow growth in the sector.

Customs duty on imports of Aluminum alloy hurts the trade
There exists 40% customs duty on import of aluminum alloy which is used as a basic raw material in the manufacturing of aluminum utensils products. This has compelled the manufacturers to resort to buying raw material in the form of aluminum scrap which is being supplied from Afghanistan and Iran. This not only hurts the local aluminum utensils industry but also the automobile industry of Pakistan.

Limited participation of aluminum utensils exporters in trade fairs
Exporters in this sector have little to no presence in international trade fairs. This reduces the opportunities for local exporters to enhance their businesses with the potential partners resulting in limited footprint abroad.

Increased frequency of FBR annual audits adds to Operational costs
Majority of the exporters in the aluminum utensils sector have complained about frequent sales tax audits leading to increased costs of doing business as exporters have to spend a hefty amount every year in order to maintain their books and documents.

Lack of testing laboratories
Majority of exporters have to get their products tested from testing labs in Dubai due to lack of testing facilities in Pakistan.

Recommendations:

Focus should be on bringing variety in the product range
Existing products need modifications to meet the global requirements such as introducing advanced varieties of pressure cookers. Moreover, global trends have been shifting towards anodized and die-cast aluminum utensils products.

Approach needs to be more Export-oriented
Only 20% of what is being produced locally is exported after meeting local needs. Innovation should be brought as per the international demand with a focus on increasing the export share.

Export of recycled Aluminum ingots should be limited
Majority exporters face issues with the availability of recycled aluminum ingots as these are being exported instead of being supplied to local manufacturers. A limit should be imposed on exporting aluminum ingots in the primary form to facilitate local industry.

Improve working conditions and provide monetary compensation to attract labor
To attract labor in this industry, there is a need to improve working conditions and make the internal working environment of a factory more conducive. This can be done by switching working hours during the summer months to evenings because weather is comparatively much cooler at nights.

Barriers on Import of Raw materials should be removed
Government should look to remove barriers on import of raw materials so that manufacturers can minimize their costs.

Benefits available to the Five-exports sectors should be available to all export sectors
Textile, leather, carpet, surgical and sports good sector are the five sectors that enjoy a number of concessions. These concessions should be extended to other potential sectors as well to promote manufacturing.

Government should subsidize air purifying plants for SMEs
Owing to high cost of installing purifying plants, government should partially subsidize the air purifying plants near aluminum burning furnaces.

Establish bonded warehouses to facilitate exporters
Bonded warehouses should be established to store raw materials used in aluminum utensils industry and other associated industries to facilitate the exports.

Upgradation of Technology & Machinery in the Common Facility Center
Common Facility centers like Gujranwala Tools, Dies & Moulds Center (GTDMC) and Gujranwala Business Center (GBC) should upgrade their technology and machinery for the betterment of the industries in the Gujranwala cluster.

Initiate Industry Development Programs under Public-Private Partnership between SMEDA & APAUMA
SMEDA and APUMA should initiate development projects together to enhance productivity and reliability of the aluminum utensils products.

40% customs duty on import of Aluminum alloy should be removed/reduced
For the industry to import raw material at low cost, it is important for the government to remove/reduce customs duty on import of aluminum alloy.

Inspection from National Productivity Organization (NPO) is required to reduce cost of production
Aluminum utensils industry should avail services of NPO which includes productivity & quality related training programs, resource efficiency audits, consultancy/advisory services and industrial productivity enhancement.

State Bank of Pakistan should facilitate 3^rd part payments
A third-party system should be established by the SBP to facilitate payments coming for exports made to the markets which are grey/black listed by FATF or lack banking/payment channels to pay for their imports.

Access to International Exhibitions should be facilitated by TDAP
TDAP should ease the process of participation of aluminum utensils manufacturers in international exhibitions by providing them with information about visa processes for different countries, exhibition pavilion/stall prices for different product categories and arrange meetings with relevant businessmen to boost trade.

Single Country Exhibition Model can boost exports for the sector
Single country exhibition model should be followed where annual exhibitions can be held in countries where there is potential to increase exports. This should only be open for aluminum utensils manufacturers where they can showcase their products and interact with importers.

Vocational training should be provided by creating linkage with the Light Engineering Upgradation sector
Vocational training should be provided to labor and allocated to different factories as per the requirement.

Pakistan Single Window training workshops should be held annually for exporters
Annual training workshops should be provided to the exporters

Reduce the frequency of FBR audits to reduce operational costs
Audits should be reduced to once every 3-4 years to reduce the burden of manufacturers of extensive book keeping.

Funding is required for high-tech machinery in CFC of aluminum utensils sector
Government should provide funding to aluminum utensils sector from the Export Development Fund (EDF) and help exporters by upgrading the CFCs that would benefit everyone in the sector. Additionally, SMEDA could also be involved in funding of the schemes by developing easy-loan/quick-loan programs for exporters.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 100+) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk

The global apparel market comprises of every kind of clothing, from sportswear to business attire, from value clothing to statement luxury pieces.

For the purpose of this Study, the apparel market is defined as comprising of tariff lines under HS-61: Articles of apparel and clothing accessories, knitted or crocheted, and HS-62: Articles of apparel and clothing accessories, not knitted or crocheted.

Source: ITC Trade Map

Revenue was forecast to increase in 2023, to more than $ 1.7 trillion USD increasing further to $ 1.95 trillion USD in 2026. In 2022, China led the rankings for global apparel exporters. The US was second only to the EU in the value of apparel imports.

The US Apparel Import Trends

Imported apparel accounts for a significant portion of the US market reflecting the nation’s reliance on global supply chains. Countries like China, Vietnam, and Bangladesh have traditionally been major contributors to US apparel imports.

As mentioned previously, apparel in this report will cover tariff lines under HS Code 61 – Articles of apparel and clothing accessories, knitted or crocheted and HS Code 62 – Articles of apparel and clothing accessories, not knitted or crocheted.

By 2026 the value of US imports of apparel is forecast to grow from $ 105.0 billion USD in 2022 to $ 117.52 billion USD.

Source: ITC Trade Map

Major US Apparel Import Partners

The major import partners for the US for apparel are China, Vietnam, Bangladesh, and India. These countries are regional and direct competitors for Pakistan in exports of apparel including to the US. China, Vietnam, and Bangladesh have traditionally been major contributors to US apparel imports, not only do these countries export more than Pakistan to the US, their price per unit for each product is higher than what Pakistan’s exports fetch.

In 2022, China exported apparel worth $ 23.65 billion USD, Vietnam $ 18.87 billion USD, Bangladesh $ 9.83 billion USD, India $ 6.0 billion USD and Pakistan $ 2.98 billion USD to the US. The forecasted growth in apparel imports into the US shows that as China and Vietnam’s exports slow, Bangladesh, India, and Pakistan’s exports in apparel categories to the US will grow. At the current trends in exports, it is forecast that in 2026 Pakistan’s apparel exports to the US will be worth $ 4.50 billion USD.

The US imports of apparel from Pakistan

Pakistan ranks as the 10th largest import partner for HS Code 61 and the 9^th largest import partner for HS Code 62 for the US. Although it is in the top 10 rankings for both HS-61 & HS-62, current exports are well below potential.

This Study provides a comparison between the top products of HS Code 61 and HS Code 62 imported by the US from its trading partners including Pakistan. The study relies primarily on secondary data supplemented with interviews with Pakistani apparel exporters to the US. The study aims to show how Pakistan is competing with other countries supplying the US with apparel.

The recent trend in apparel is shifting to blended clothing (Synthetic fibers). China and Vietnam are top trading partners for the US for those products, each holding a large market share. Pakistan can also potentially increase its share in US market if Pakistan diversifies its product mix and focuses on products that are in high demand and have been projected to have high growth rates in the coming years.

Key findings of the Study:

In 2022, the US’s total imports for HS Code 61 (Articles of apparel and clothing accessories, knitted or crocheted) and HS Code 62 (Articles of apparel and clothing accessories, not knitted or crocheted) amounted to $105.4 billion USD. The top exporting partners for apparel for US in 2022 were China, Vietnam, Bangladesh, and India.

US Imports of Apparel by Percentage Share:

1. China: 22.6%
2. Vietnam: 18.0%
3. India: 5.7%
4. Bangladesh: 9.3%
5. Pakistan: 2.9%

Pakistan’s Per Unit Price Advantage – but not translating into increasing market share:

From a per unit price perspective, Pakistan’s per unit price has been consistently lower for almost all products in both HS Code 61 and HS Code 62. In both HS-61 and HS-62, India, China and Bangladesh perform consistently better than Pakistan on a per unit price comparison. For HS-61, Vietnam dominates, while for HS-62 Bangladesh consistently remains in the top 3 exporters for nearly all significant tariff lines. India, which like Bangladesh is a regional competitor for Pakistan, in both HS-61 and HS-62, performs better than Pakistan even though Pakistan’s per unit price is lower than both India’s and Bangladesh’s. As expected, China is in the top 3 exporters for major lines in both HS-61 and HS-62 with a higher per unit price as compared to Pakistan.

Increasing Use of Alternate Fiber in Apparel

The synthetic fiber which is currently most used for manufacturing apparel is polyester. Its demand overtook that of cotton in 2002, and since then, it has increased much more rapidly than any other type of fiber. Of the top 20 apparel products imported by the US under HS Code 61, 50.0% of the products were made of synthetic fiber valued at $ 17.7 billion USD while at least 25.0% of the tariff lines imported under HS Code 62 were made out of synthetic fiber valued at $ 12.6 billion USD in 2022.

An analysis of tariff lines of HS-61 & HS-62 with annual imports into the US of $ 50.0 million USD and more, shows that imports of apparel made from synthetic fiber were valued at $ 23.7 billion USD in 2022 whereas for HS Code 62 the corresponding number was $ 17.5 billion USD. The total imports of the US under HS-61 & HS-62 was $ 105.0 billion USD. In 2022, the US’s total imports of apparel from Pakistan were worth just $ 2.9 billion USD.

For imports from Pakistan, a total of 10 apparel tariff lines had values of more than $ 50.0 million USD. Out of these, 7 were in HS-61 with total imports of $ 1.4 billion USD while there were 3 tariff lines in HS-62 which had imports greater than $ 50.0 million USD with total imports of $ 1.0 billion USD.

For apparel using MMF, there is only one tariff line from Pakistan with imports greater than $50.0 million USD; 611596 – (Full-length or knee-length stockings, socks and other hosiery, incl. footwear without applied soles, of synthetic fibres, knitted or crocheted (excl. graduated compression hosiery, pantyhose and tights, women’s full-length or knee-length stockings, measuring per single yarn < 67 decitex, and hosiery for babies) with imports of $ 93.8 million USD in 2022.

There are no tariff lines in HS-62 made from synthetic fibre with annual imports of more than USD $ 50.0 million to the US from Pakistan.

There is thus a disconnect between what the US imports and what Pakistan has to offer in both HS-61 & HS-62, especially when it comes to apparel using synthetic fibers.  China and Vietnam are major players for products under HS Code 61 while under HS Code 62, China, Vietnam, and Bangladesh are the top importing partners for the US.

Global Trend is Shifting in Apparel

Global demand trends show that man-made fiber apparel has been gaining popularity. The reasons for this include an increase in athleisure, durability, price, and the perception that these are better for the environment. Synthetic textiles are now softer, hang better, and even have a superior ability to absorb moisture as compared to cotton. They also fulfil international safety and protection standards. This trend is clearly visible in imports of apparel by the US and other major markets for Pakistan.

Pakistan, thus, cannot ignore the potential that the global markets and especially the US market offers for import of apparel (HS-61 & HS-62) made using synthetic fibers.

Recommendations

Need to develop a consensus among various stakeholders:

A consensus needs to be developed between the various industry players; i.e., the apparel manufacturers and the local industry involved in the production of synthetic/polyester fiber. For synthetic/polyester apparel exports to increase, the local apparel industry must have access to raw material at comparable prices to their international competitors. At the same time a considerable amount of investment has been made by the polyester industry in plants which will need to be safeguarded.

Correct Customs classification of raw materials:

Most of the new synthetic yarns/fabrics developed in the past 10 to 15 years are not classified separately by the Pakistan Customs. In the absence of an updated classification, these new materials are subjected to tariffs which have been imposed to protect domestic industry which does not exist for most of these materials. It is therefore important that proper HS-codes be allotted to these products.

Facilitate Pakistan becoming an apparel manufacturing hub:

The government needs to have in place a policy which encourages manufacturers to import for export duty free all raw materials including yarn, fabric, accessories, packing material used in the manufacture of apparel.

Promote JVs in the apparel sector:

JVs in the apparel sector need to be promoted, in addition to ease of issuance of work visa for technical and managerial staff, tax holidays for the units and zero or very low-income tax rates for expatriate staff need to be offered. In addition, there should be on restrictions on repatriation of profits or salaries of expat staff.

Upskilling of Manpower:

A comprehensive plan needs to be implemented for upskilling manpower. Though some processes are common, others need to be learnt.

Industry Standards Need to be Mandated:

Industry standards need to be mandated to ensure that locally produced MMF apparel meets international standards, not just of the fabric but also the apparel.

Incentivize apparel made from Synthetic fiber/MMF

Government incentives for the apparel sector need to be focused on apparel made from synthetic or man-made fiber.

Special Economic Zones for Apparel

Special Economic Zones (SEZ) for apparel are needed to promote the sector, clustering will help the sector grow at a faster rate. However, the size of the plots in the SEZ need to reflect the demands of the sector.

In-dept Global Market Research

Better information is needed by the apparel sector regarding trends in the global synthetic apparel sector. Government & industry need to work to identify the key markets and the marketing strategies for each.

Trade delegations to promote exports

Industry needs to have greater exposure through visits to the key markets and through industry specific exhibitions in the key markets.

Promote sustainability & eco-friendly practices:

Industry will need to embrace sustainability and eco-friendly practices including carbon footprint.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 96) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk

The Pakistan Business Council (PBC), through its “Make-in-Pakistan” thrust has long advocated industrialization as the means of generating employment, promoting value-added exports and encouraging import substitution in a sensible and sustainable manner. Aside from broadening the tax base, it advocates for additional tax revenue to flow from higher profits of business, not from higher rates of tax or new taxes. PBC also recommends consensus between political parties and key stakeholders on a minimum set of fundamental reforms. This is essential to provide assurance of continuity and consistency in the policy framework, as also to mobilize additional resources to fund investment in socio-economic development. Pakistan stands at the bottom of South Asia in virtually all socio-economic indicators.

Recently the government has embarked on a fresh impetus to revive industrial growth. This checklist is drawn from the PBC’s more detailed studies available on its web site and its earlier checklist published in May 2021: www.pbc.org.pk. Much of PBC’s advocacy addresses the three platforms of “Make-in-Pakistan”, namely “Grow More/Grow Better”, “Make More/Make Better” and “Serve More/Serve Better”.

The checklist provides an action toolkit for policy makers’ attention and is split into four parts:

1. Checklist for Promoting Corporatization and Formalization of Business
   This sets out the basic enablers for the formal sector to gain scale and competitiveness to galvanize effective action.
2. Export Checklist
   The main thrusts are to promote exports. Exports are the only sustainable way to balance the external account and achieve solvency and autonomy for the country.
3. Import Substitution Checklist
   The key actions to facilitate import substitution in a sensible and sustainable manner without indefinitely undermining consumer value and choice.
4. Priority Sectors for Growth
   These are the main sectors identified for special focus

Electric vehicles (EVs) have the potential to drive multi-faceted growth in Pakistan, but clear and focused policy measures are crucial for success. India and several ASEAN countries have already demonstrated successful transitions to EVs, establishing local industries in the process. The global market, regulated by the United Nations WP.29 guidelines, prescribe standards for universal adoption, facilitating cross-border acceptance. This ensures that investments made to create export-focused EV products have consistent long-term demand regardless of the country of origin.

The report explores how EVs can be facilitated in Pakistan through policy and procedural frameworks, leading to a range of long-term benefits. The total cost of ownership (TCO) of EVs remains higher than internal combustion engine (ICE) vehicles, mainly due to high battery costs. However, the economic benefits are significant, including lower fuel imports, a reduction in unutilized generation capacity, and contributions towards greenhouse gas (GHG) reduction. With an export focused vision, the transition to EVs can usher a new era for the auto industry, one which contributes valuable forex to the exchequer instead of draining it.

There is a favorable market opportunity for electric vehicle (EV) adoption in Pakistan’s two-wheeler and three-wheeler market segments. Achieving standardized inter-operable parts will create a large enough market for complete localization of EV components. To enable the use of three-wheelers for personal/non-commercial purposes, the government needs to revise regulations to allow three wheelers for personal, non-commercial use. Two-wheeler and three-wheeler adoption will necessitate charging and battery swapping infrastructure. With readily available home, office and public charging infrastructure adoption of four wheelers will be natural.

The four-wheeler market is hindered by price sensitivity, and the limited domestic demand alone cannot support large-scale local indigenization. To establish such a market and drive growth, Pakistan needs to tap into the global market to access larger customer base and leverage economies of scale. While it may not be feasible for Pakistan to export complete cars in any form, car parts can easily meet the required WP.29 standards and become export-ready. Developing the industry with a vision for global market will contribute to long-term industrial growth. It will lead to economies of scale, enabling the production of globally competitive and cost-effective cars.

Hybrids present a unique opportunity; more expensive than standard EVs, they cater to the eco-friendly and less price sensitive consumer segment. While the scope for indigenization is limited, easing their introduction can serve as a test bed for infrastructure development and regulation.

For the successful adoption of EVs in heavy and light commercial vehicles, substantial investment in charging infrastructure is necessary. Strategically located public chargers along metro routes and motorways can encourage adoption.

Regulatory measures and fiscal incentives have already been introduced to facilitate EV adoption. Adopting the EV regulatory framework set forth by WP.29 is recommended as an initial step to define the EV vision and establish focused policies in Pakistan. However, further clarification is needed in building codes, tariff regulations, and quality specifications. Addressing challenges related to raw material supply chains for EV components, such as lithium and rare earth metals, is crucial to avoid future import dependency. Developing domestic sources or securing sustainable international supply chains is paramount. Regulatory oversight is also necessary to ensure sustainable and efficient use of resources throughout the EV lifecycle. Implementing government charging infrastructure in model cities can catalyze market action and encourage consumer adoption of EVs.

To achieve indigenization of the EV industry, establishing a link between government-funded intellectual property (IP) development and industries, and open-sourcing these developments is essential. Cross-functional industries, such as electronics, that contribute to the EV ecosystem should receive sectoral tax exemptions through HS code extensions.

Moreover, a complete overhaul of the existing people-oriented processes, to an IT-focused one-window portal is necessary to streamline operations and enhance efficiency. This will simplify procedures for businesses, investors, and stakeholders in the auto industry.

Making bold and deliberate decisions is crucial for creating a sustainable and future-proofed auto industry in Pakistan. By adopting standardization, focusing on localized parts manufacturing, promoting indigenization through open-sourced IP, providing time restricted, sharply focused fiscal support, and embracing digital transformation, Pakistan can pave the way for a thriving and competitive EV ecosystem.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 89) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

Global Cutlery Exporters

China is the world’s leading exporter of cutlery with global exports of USD 16.0 Bn, followed by Germany (USD 1.3 Bn) translating into market shares at 60.9 percent and 4.79 percent respectively.

Pakistan’s Cutlery Sector

Pakistan’s cutlery sector is a fragmented cottage industry that mostly manufactures hunting knives and tableware such as spoons and forks, with a few manufacturers making cooking ware utensils such as pots and pans in Wazirabad and Gujranwala. Products classified as cutlery products include: 1) tableware items such as spoons, forks, knives, etc. 2) handcrafted hunting knives 3) cooking utensils.

Tableware is mostly sold in the local market, while hunting knives are exported. Hunting knives are made from Damascus steel. Damascus steel is a type of steel easily recognizable by its wavy patterned design. Utensils are exported as well as sold in the local market. Pakistan’s largest export customers are the USA; countries in the Middle East; the UK; the EU and Afghanistan.

Major Findings

• Our findings indicate that the Pakistani cutlery sector is no match for the Chinese industry as far as output, quality and prices are concerned. Pakistan is able to survive in the Damascus steel knives sector because China is not willing to venture into Damascus steel making due to the small-scale production batches for the steel, making it unfeasible for machines and processes tuned for mass production. For China, the cost of venturing into Damascus steel blade manufacturing outweighs the benefits.
• Stainless steel is the main component used in making cutlery. To ensure quality, manufacturers have to use imported steel from China. Not only is Chinese steel of better quality, but cheaper, even though prices have been increasing due to depreciation in the value of the currency. Manufacturers reported that raw materials comprise 33 percent of their production cost.
• The machinery used in making cutlery in Pakistan is several decades old. Processes are mostly semi-automated. Lack of conveyor belt system for production was noticed. All production processes are hand-operated which severely limits the productivity and speed of the production processes.  Some of the machinery which was donated by foreign donors has remained mostly unused at the Cutlery Institute of Pakistan (a government provided common facility center) for the last several years.
• Currently the cutlery sector is asking for further protection in the form of higher tariffs, as high as 50 percent, on cutlery imports. Protectionism is contrary to the objective of enhancing competitiveness and would hurt the industry in the long run. That being said, some protectionism is pragmatically necessary for the local industry to survive.
• A mix of formal and informal units are engaged at different stages for the completion of a single product. Sometimes different processes are subcontracted to smaller units. While this keeps costs low, it affects consistency in quality as the smaller units often do not follow quality control procedures. Pakistani processes have a wastage of 30 to 50 percent as compared to other countries where wastage is between 10 & 15 percent.
• Subsidized financing is available in the form of various SBP schemes; however, the Cutlery Sector does not utilize these available schemes due to either (1) lack of knowledge or (2) inability to fulfill documentary compliance requirements. Instead, the Cutlery Sector borrows from informal channels who charge very high markups.
• Most hunting knife manufacturers are small players and they are selling via e-commerce platforms.
• Branding and marketing appear to be almost non-existent. Pakistani manufacturers generally do not brand their products.
• Most exports are directed to the USA, Germany, the UK, Saudi Arabia and Afghanistan. This is due to a variety of factors such as the inability of businesses to seek out new markets, inability to contact commercial counselors present in non-traditional markets, banks reluctance to approve Letters of Credit from non-traditional markets and other payment difficulties.
• Pakistani products made from stainless-steel face competition from ceramic knives and ceramic cooking utensils. Ceramic knives are known to hold their edge much longer than stainless steel ones while ceramic utensils are known to be more durable than utensils made out of stainless steel and aluminum. At the moment, Pakistan does not have the capability to manufacture ceramic knives and utensils and hence faces tough competition from substitute products in both local and foreign markets.
• Within the cluster, there are 3 government facilities available to the sector. The Small Industries Estate inaugurated in 2014 but not yet operational; the Cutlery Institute of Pakistan inaugurated in 2001 and currently defunct; and TEVTA which appears to be functional with ongoing classes, having computers in working condition with and functioning machinery. Apart from training workers, TEVTA also fulfills job orders for the cutlery sector. Recently the Association reported that they were looking to restart the Cutlery Institute in collaboration with TUSDEC (Technology Upgradation and Skills Development Company).

Key Recommendations

• In order to promote Make-in-Pakistan and to become a player in international markets, the sector will need to step up in several areas such as product quality, upscaling, branding etc.
• It would be more cost-effective if the imported raw materials were stored in bonded warehouses instead of a raw materials bank. Bonded warehouses defer customs duties & other taxes till the goods are moved out of the warehouse for processing. Deferring duties until the raw materials are needed would be beneficial in lowering the cost of raw materials which is the biggest hurdle according to the Association.
• The cutlery sector would like an increase in the SME Asaan Finance scheme limit from PKR 10 Mn to PKR 30 Mn. The association also proposes the inclusion of cutlery sector in SBP Refinance Scheme for Working Capital Financing of Small Enterprises and Low-End Medium Enterprises so as to avail this facility at 6 percent markup.
• A single window may be established as a connector between manufacturers and various government departments such as the Labor Department, Social Security Department, EOBI, Environment Protection Department, Income tax department, sales tax department etc.
• It is important to reduce wastage and reworks to near competitor levels. Pakistan’s raw material wastage is 30 to 50 percent whereas wastage in other countries is between 10 & 15 percent. It is recommended that Pakistani engineers may be engaged to review the current design of dies and review the production processes so as to reduce wastage to competitive levels. Other options include the use of consultants to make the sector aware of how to reduce wastage. The funding for such consultants may come from the EDF.
• The reluctance to stamp ‘Made in Pakistan’ or their own brand name minimizes the potential to get a premium price or to sell in new markets. Pakistan could learn valuable lessons from the Turkish ‘TURQUALITY’ Program through which the Turkish government has been funding the development of 10 global Turkish brands. A “PAKQUALITY” initiative may be promoted under a Public Private Partnership model to ensure that Pakistani brands also become regional / global icons.
• Most exports are directed towards the USA, Germany and the UK. This underlines a concentration risk. TDAP may explore new markets by arranging and organizing multiple exhibitions in markets with potential.
• The currently available government facilities for the sector appear to be under-utilized. Both TEVTA and CIP were formed to achieve the same objective i.e., to establish a common facility center for the sector. While the cutlery sector is collaborating with TUSDEC to restart CIP, the presence of two common facility centers to achieve the same objective `needs to be revisited. It is suggested that the federal and provincial government departments agree on establishing a single common facility center and build its capacity instead of running two parallel facilities. This will save resources.
• Currently the cutlery sector has been provided three government facilities. CIP, Small Industries Estate and TEVTA. The sector association is recommending the setting up of two more facilities. A training institute for skills such as management, branding and marketing as well as a dedicated institute for teaching cutlery making. For this purpose, a sub-institute under TEVTA may be set up for specialization in cutlery manufacturing. Creating a sub-institute rather than a fourth institute will also save resources. Specialists from foreign countries may be brought in to provide training and certification courses may be introduced.
• Exports of cutlery items to the USA are tariff-free. Pakistan should take advantage of this by including cutlery manufacturers in trade delegations to the USA. Commercial counselors in the USA may be approached to promote cutlery exports highlighting the fact that these items from Pakistan face zero-tariffs.
• Metallurgical engineers from universities such as the Ghulam Ishaq Khan Institute, NED University, Punjab University etc. can be linked with the cutlery sector to provide expertise on the latest processes being used in manufacturing worldwide. Internship programs may be set up to link engineering students with manufacturers.
• Ceramic knives are sharper and lighter than steel. Ceramic knives also fetch a higher price than steel knives. Pakistan may explore the possibility of investing in the machinery and processes to start manufacturing ceramic cutlery. This is supported by the fact that Zircon, the raw material for ceramic, is available in Pakistan.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 96) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk

As part of this Study, the PBC conducted secondary research of available data and supplemented it with interviews with major firms operating in Pakistan in this category. The Study identifies the opportunities and challenges in the spice mixes category and proposes a set of policy recommendations aimed to increase exports of Spice Mixes from Pakistan.

The global market for the spice mixes category was estimated at USD 17.75 billion in 2021 with global exports of USD 620.1 million in 2021. European countries had around 44 percent share in global imports of spice mixes in 2021, worth around USD 305 million. China, India and Pakistan are the market leaders in the spice mixes export category.

Pakistan was the 3^rd largest exporter of Spice mixes in 2021 with exports of USD 80.8 million with a growth rate of 8.1 percent between 2012 and 2021. Pakistan’s spice mixes exports constitute 13 percent of the total global exports.

Pakistan’s spice mixes category presents an opportunity for growth, but this growth is hampered by factors primarily related to weak mainstream distribution channels in potential markets, a limited presence on e-commerce platforms, the absence of a spice industry association, grey channel exports, high logistics cost, lack of access to cheaper raw materials from the cheapest international source, insufficient funds to meet marketing / expansion expenses abroad and a fluctuating exchange rate.

Major Findings:

• Spice Mixes from Pakistan are Well Established in Export Markets
  Pakistani brands hold around 70-80 percent share in export markets as compared to their competitors’ brands indicating that Pakistani products are more popular among consumers. The target market for Pakistani Spice Mixes is the Pakistani and North Indian diaspora in the major markets of the West and the Middle East.
• Varying Packaging & Labelling Requirements
  Labelling and printing of nutritional information on packs of spice mixes varies across markets. Same packaging can thus not be used in the EU, the US, the Middle East and the Canadian market.
• Weak Mainstream Distribution Channels
  In the major export markets, Pakistani spice mixes brands are usually missing in mainstream superstores such as Walmart, Lulu, Carrefour etc., this restricts the reach of products.
• E-commerce Platforms are Not a Major Conduit in Export Markets
  Pakistan’s spice mixes brands have mostly been unable to tap into the e-commerce channels in most of the core export market. Awareness programs need to be introduced by the government and associations to help exporters understand the nitty gritty of the e-commerce platform.
• A Ban on Direct Trade with India Increases Costs:
  India is the major global supplier of most of the spices used in Pakistani cuisine and has been a traditional supplier of the same. Currently due to a ban on direct trade with India, most Indian spices are being re-routed through other destinations increasing cost.
• Absence of a Spice Industry Association
  Pakistan’s spice industry currently does not have a common platform in the form of a dedicated association that can truly advocate on behalf of the industry.
• Presence of Grey Channel products in Export Markets
  Afghanistan, mainland Europe (Spain, Greece & Italy) and Malaysia are seeing the presence of grey channel products. The problem with grey channel products is majorly that of labelling on the packaging as well as traceability.
• Market Diversification is Required
  The potential next frontier for Pakistani brands could be the North African Diaspora as there has been a lot of migration from these regions to mainland Europe. Additionally, Mediterranean and Iranian diaspora also provide an opportunity for Pakistani spice mixes brands.
• Major Difference between Pakistani & Global Consumers
  Globally, markets are moving towards bulk buying or buying larger pack sizes whereas Pakistani markets are moving towards smaller and smaller consumer packets. This seems to imply that globally consumers have become budget conscious and save money by purchasing bigger packs whereas consumers in Pakistan have become more price conscious and prefer purchasing one-time-use small packs.
• Use of BTL Marketing Mode in the Spice Mixes Category
  Below the Line (BTL) marketing mode is usually used by the brands to target specific groups through media such as digital marketing, direct mail marketing, sponsorships, in-store marketing etc. Through this mode, businesses are able to focus on interests, geographies and even ethnicities.
• High Logistics Cost
  Over the last few years, the global shipping crises coupled with a shortage of shipping containers has led to increased costs.
• Insufficient Retained Exports Income to meet Expenses Abroad
  As per the State Bank of Pakistan (SBP) rules, businesses are allowed to retain only 10% of their export proceeds to cover marketing and other expenses in international markets.

Recommendations:

• There is a Need to Increase the Market size by Moving Beyond the Ethnic Markets
  A successful marketing strategy needs to be put in place to convert non-users to users especially consumers beyond the diaspora. It is very important to target the non-ethnic consumers in the export markets. The Indian / Pakistani diaspora has been well targeted in the western markets and now in order to increase the pie size, it is important to target non-ethnic consumers.
• Collaboration Needed Amongst the Local Manufacturers as well as with the Government
  Key industry players need to lobby with the government for greater market intelligence and detailed market research. This will help the industry identify global trends and major opportunities as well as the specific requirements of new target markets. Funding can be provided from the Export Development Fund (EDF).
• National Brand Building Programme Through a Public-Private Partnership (PPP)
  A State sponsored national brand building programme needs to be initiated. There is a need to improve the brand image of Pakistani products as Pakistan is not considered a reliable supplier. This can be done by addressing the perception of Pakistan.
• Improving Access to New Markets
  In order for Pakistan to increase its exports of spice mixes products, it is important to access new markets and bring variations in the spice mixes products as per the target markets’ taste. This can be achieved through greater participation in exhibitions and efforts need to be made to promote Pakistan’s ethnic cuisine.
• Businesses be Allowed to Invest in the Development of Export Market
  The 10% cap on using the export proceeds to fund international growth needs to be revisited. Firms with exports beyond a certain threshold be allowed to invest in market and brand building activities.
• Organizing Pakistan Food Festivals in Major Markets
  TDAP needs to organize Pakistan Food Festivals in major markets and try to rebrand Pakistani cuisine as separate from Indian or South Asian cuisine. Only recipe mix manufacturers should be allowed to participate and to use only their recipe mixes in preparing the dishes.
• Firm Need to develop New Communication Strategies to Target the Younger Generation
  Emotional appeals based on connections to their home countries will eventually lose their appeal. Hence, new strategies are required that can appeal to the younger generation. This could be done by informing them about the easy-to-use benefits and the role that spice mixes can play in preparing a wholesome, delicious and quick meal.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 97) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk

The processed food sector, of which the biscuits and bakers’ confectionery industry is a sub-sector, is Pakistan’s second-largest industry after textiles; accounting for 27 percent of the value-added output and 16 percent of industrial employment.

This study relies on existing secondary research supplemented with field interviews of firms in the biscuits and bakers’ confectionery manufacturing sector.

The Global Biscuits and Bakers’ Confectionery Industry

In 2020, Germany ranked first in global exports of biscuits and bakers’ confectionery with a market share of 11.4 percent, followed by Canada at 8.4 percent, Italy 7.3 percent, and Belgium 6.3 percent. Pakistan was ranked 68^th among global exporters of biscuits and bakery products, with a market share of 0.1 percent. Pakistan’s export growth, as indicated by a positive compound annual growth rate (CAGR) for the period 2016-20, has been in line with the world CAGR, indicating that Pakistan’s exports have grown in line with global exports.

Since 2009, global imports of biscuits and bakers’ confectionery products have increased by 72.7 percent at an average annual growth rate of 5.1 percent. The United States ranked as the largest importer with a share of 16.9 percent, followed by the United Kingdom at 7.7 percent, Germany 7.1 percent, France 6.2 percent, and Canada 4.3 percent.

Pakistan’s Biscuits and Bakers’ Confectionery Industry

Pakistan’s biscuits industry has grown at a 9.1 percent compound annual growth rate (CAGR) in the last 5 years, as per the Pakistan Credit Rating Agency (PACRA).[1] In the same period, the bakers’ confectionery industry expanded at a 9.4 percent compound annual growth rate.[2] Since 2016, exports of Pakistan’s biscuits and bakers’ wares have increased by 49.4 percent at an average annual growth rate of 10.6 percent, reaching $40.92 million in 2020. The North American and Middle Eastern markets have remained mostly untapped for baked product exports from Pakistan. Other top prospective markets include countries in Africa that have an export potential of US$ 77.9 million. Opportunities are also available for a few tariff lines under Pakistan’s current trade agreements. Biscuits and baked goods from Pakistan can be exported under preferential tariffs to China, Malaysia, and Indonesia.

India’s manufacturing facilities have a competitive edge over Pakistan’s in terms of domestic market size and the availability of sophisticated, locally manufactured plants and machinery. Pakistan’s corporate tax and policy rates are higher than those in India. Bangladesh and India increased their exports of biscuits and bakers’ confectionery products by 5.2 and 1.6 times, respectively, between 2011 and 2020; in the case of Pakistan, exports increased by a multiple of only 1.1.

Industry’s View on the Competitiveness of Pakistan’s Biscuits and Bakers’ Confectionery Industry

In-depth interviews with senior executives of companies belonging to Pakistan’s biscuits and bakers’ confectionery industry were conducted to gain insights into the competitiveness of the sector. The interviews were supplemented with secondary research to better understand global, regional, and domestic market trends. The major findings from these interviews supplemented by secondary research are:

• Cost Pressures: Increasing edible oil prices and the high dependence on its import have adversely impacted food manufacturers and consumers. In addition, high rates of inflation, an increase in the cost of utilities, and a general slow-down in the economy are putting some in the sector at a business risk.
• Large Domestic Market with High Levels of Penetration: The biscuit market is large in Pakistan, and each sub-sector is substantive on its own. The market is still in the growth stage as growth is higher than the growth of the overall economy. There is hardly any sub-sector that is not covered by one of the major manufacturers. Market penetration is nearly 100%.
• Industry Positioning: Biscuits in Pakistan are mostly positioned as snack or indulgence products instead of nutritional supplements – biscuits thus are not “staples” for consumers and purchases can be deferred. Globally biscuits and baked items are part of major festive seasons; in Pakistan, however, the industry has been unable to position itself as part of any festival.
• Price Elasticity of Demand: The price elasticity of demand is inelastic, resultantly manufacturers when faced with cost pressures are unable to transfer the full impact to the consumers.
• Absence of a National Food Standard: Each province has its own food standards which at times are in conflict with the standards being applied in another province. Additionally, local standards are not aligned with any international standards and this impacts competitiveness in global markets.
• Rampant IPR Violations: Counterfeit/mushroom brands produced by the unorganized sector are a major threat to the formal sector. Counterfeit/mushroom brands have also made their way into export markets.
• Exchange Volatility & Profit Repatriation Restrictions Discourage FDI: Environment is not conducive for FDI in the sector, not only is there exchange volatility, but also there are restrictions on profit repatriation.
• Potential Export Markets: Major markets which have not been tapped include countries in Africa, Europe, and the Middle East. Off-shore production facilities in regional countries could potentially help exports as Pakistan does not have a country-of-origin advantage when it comes to the manufacture and exports of biscuits & bakery products.
• Non-Tariff Barriers in Export Markets: Non-Tariff Barriers (NTBs) including testing requirements for banned ingredients, packaging, and labeling requirements are a major hindrance in entering smaller markets of Africa and Eastern Europe. In addition, there are frequent changes in regulations in developing economies which makes long-term planning and investment decisions difficult.
• For Global MNCs, Pakistan Mostly is Not a Low-Cost Option: The major ingredients which go into the manufacture of biscuits are palm oil, wheat & sugar. Though palm oil is available at international prices, wheat and sugar prices in Pakistan are higher than global prices. Local operations of global brands are generally at a price disadvantage vis-à-vis other affiliate of the same MNC.
• Domestic Manufacturers Have Always Had an Inward Focus: The local industry has grown on the basis of the domestic market and thus has an inward focus. Though most companies now appreciate the importance of exports as the next major growth opportunity, their focus is still on the Pakistani market and the Pakistani diaspora in regional and global markets.
• Tax Evasion is a Major Concern: Very high rates of Taxes, especially Sales Tax (17%) and Corporate Income Tax (29%), plus other levies like WPPF & WWF, provide a massive incentive for under-reporting production and sales. Unscrupulous manufacturers have used this

Recommendations

• Reduction in Sales Tax Rates: The formal compliant sector faces an existential threat from both the informal sector as well as unscrupulous registered manufacturers who mis-declare production and sales numbers. Either the rate of Sales Tax be reduced or else a Track & Trace system be implemented to monitor production and sales.
• Repositioning from Snack Category to Nutritional Category: By bringing in the nutrition supplement angle, albeit initially for some brands, and promoting this position aggressively, the industry can become part of government/donor nutrition programs as biscuits can cost-effectively deliver the supplements.
• Participation in International Trade Shows: Manufacturers, especially Pakistani firms, recommend greater participation in international exhibitions to showcase the industry since Pakistan is not a major sourcing country.
• Warehousing and Credit Guarantee Schemes for Sales in Africa / Central Asia: Most sales in Africa and Central Asia are done on a spot basis, for which local warehousing is a prerequisite. Indian, Chinese, and Turkish firms have managed to do well as their governments support them in setting up and funding warehouses in these target countries. In addition, in the absence of formal banking channels in most of these markets, exporters are reluctant to sell directly to importers in these countries. The EXIM Bank needs to come up with a credit guarantee scheme for Pakistani exporters.
• Brand Pakistan Needs to be Promoted: A concerted effort to promote Brand Pakistan is required. A PAKQUALITY initiative along the lines of the TURKQUALITY initiative is required to promote not just Pakistan but also Pakistani brands.
• Database & Market Intelligence: Information about market potential and changing consumer trends is required on an ongoing basis from both current and potential markets. In addition, information should also be available on both tariff and NTBs, such as packaging and labeling requirements. The TDAP needs to develop this database.
• Common National Standards Aligned with Globally Acceptable Standards: Pakistan Standards and Quality Control Authority (PSQCA) should set the standards for the industry, with the provincial authorities only acting as implementation bodies. PSQCA standards should be aligned with globally acceptable standards to allow easier compliance.
• Provision of Accredited Labs: Pakistan’s biscuit industry needs to lobby with the government to set up accredited laboratories for testing for compliance. Compliance with international standards could allow Pakistani products to enter more lucrative markets in the Far East and Europe.
• Incentives for R&D: Companies should be provided incentives for investing in R&D. Increasing research and development expenditures will result in introducing new, innovative items and expanding product lines.
• Zero Tolerance for IPR Infringement: Law enforcement agencies and the judiciary should stop treating counterfeiting as a soft crime so as to promote a level playing field. To counter the threats posed by the informal sector/mushroom industries, IP owners who have suffered damages should be able to pursue legal action, ideally in civil courts.
• Repatriation of Profits: The SBP must ensure the smooth repatriation of profits to the MNC’s home country to encourage foreign investment.
• Harmonization of Customs Nomenclature: While importing as well as exporting, it is essential to ensure harmonization of food product classifications and to reduce the NTBs. It would make customs clearance easier and less time-consuming, as well as improve the transparency of the valuation involved in the import of goods.
• Industry / Government Funded Joint Study: A detailed study jointly funded by the industry and the government needs to be undertaken to identify the opportunities and challenges in entering the African, European, and CAR markets as well as recommending a strategy to attain the potential.
• Export Oriented Joint Ventures Need to be Promoted: The formation of export-oriented international joint ventures will not only lead to an increase in exports but will also increase the capacity of local suppliers by updating manufacturing and safety standards for baked goods.

The PBC is a private sector not-for-profit advocacy platform set up in 2005 and is now composed of 96 of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures that improve the Pakistani industry’s regional and global competitiveness. More information about PBC, its members, objectives, and activities can be found on its website: https://www.pbc.org.pk 

[1] A biscuit is a baked food product made from flour. It is defined as a small quick bread formed from rolled-out dough that has been cut or poured from a spoon. Biscuits are classified into several types based on their recipes and manufacturing processes.

[2] Bakers’ confectionery products have relatively higher sugar content. Bakers’ confections and sugar confections are the two large and overlapping categories. Bakers’ confectionary, often known as flour confections, consists primarily of sweet pastries, pies, cakes, and other similar baked products.

Global Domestic Fan Industry:

The term domestic/household fan generally includes ceiling fans, table fans, pedestal fans, exhaust fans, and wall fans. As defined under international standards, a fan having a wattage below 125W is categorized as a ‘domestic fan’.

The global market for domestic fans has been expanding with domestic fans worth $6.1 billion sold in 2020. The industry posted a compound annual growth rate (CAGR) of 11.3% between 2016 and 2020 and sales are expected to touch $7.7 billion by 2023. China is the dominant domestic fan supplier with a global export share of 77.6%, followed by Malaysia (2.9%), and Taipei; Chinese (2.1%). The top domestic fan importers in 2020 included the USA (35.3%), Japan (5.3%), and Germany (4.0%).

Pakistan’s Domestic Fan Industry:

Pakistan’s domestic fan industry is primarily concentrated in the Gujrat and Gujranwala regions of Punjab. These two regions account for nearly 90.0% of Pakistan’s domestic fan manufacturing capacity. The total value of exports of the domestic fan industry was $24.9 million in 2020. Major export destinations for Pakistan’s domestic fans included Iraq (21.1%), Bangladesh (16.7%), and Oman (14.5%) in 2020.

In addition to existing markets, this report also focuses on potential markets for expansion which reveals that Pakistan has the highest untapped potential worth $928.0 million in the European region. Although domestic fans from Pakistan face zero tariffs in these countries, non-tariff barriers (CE markings) are stringent, and difficult to comply with. Other top potential markets other than Europe include countries in Africa, Asia, and the Middle East and these have export potentials of $122.8 million, $618.8 million, $262.0 million respectively.

Comparing Pakistan’s domestic fan industry to that of its competitors reveals that domestic fans manufactured in Pakistan are more competitive than those of India and China in terms of quality. However, Pakistani exporters are not able to offer competitive prices due to the high cost of production and heavy reliance on imported raw materials. Generous duty drawback rates and production-linked incentive schemes favor the domestic fan industry in India while China enjoys a lower cost structure due to economies of scale, availability of raw materials, and domestic testing facilities.

Major Reasons Identified for Lack of Competitiveness:

Absence of domestic supply of raw materials: Domestic fan manufacturers use around 50-60% imported raw materials such as Printed Circuit Boards from China, electric steel sheets, plastic, and so on. Major cost components of the industry are raw materials, which account for 70-80% of production costs.

Absence of skilled labor: The introduction of new technology in the fan sector is increasing day by day and industry is inducting the latest machinery for processes such as injection molding, die casting, CNC lathes, automatic presses, and stamping machines. To operate these machines and tools, well-trained manpower is required in increasing numbers.

Lack of institutional linkages providing R&D support: There is a lack of institutional linkages between the industry and academia. Novel trends in technology are therefore mostly demonstrated by large units who have in-house research and development capabilities.

Limited scope for manufacturing fans outside Gujrat and Gujranwala: Since manufacturing and local testing facilities have developed with the two clusters, there is limited scope for setting up manufacturing units outside the clusters.

Underutilized production capacity: Average production capacity utilization rate is between 40-70%.

Non-Competitive Regulatory Duties: Domestic fan manufacturers, who are unable to obtain import quotas, have to face significant Regulatory Duties (RDs) on direct imports of electric sheets. Furthermore, after removal of RD on exports of aluminum and copper, recyclers import discarded components/parts (such as compressors) and separate aluminum and copper to export in the form of ingots. As a consequence, local manufacturers have been facing an acute shortage of recycled raw materials.

Anomalies in the tax regime: Some of the imported inputs are not rightly classified and are hence subject to higher tariffs.

Risks in international businesses: Credit risk and exchange rate risk in countries like Yemen, Iraq, and low-end African and Middle Eastern markets and present, especially as Pakistan tries to comply with FATF requirements. Payment mechanisms in these countries are largely insecure, making exporters hesitant to do business.

Major Recommendations for Enhancing Competitiveness:

Advancing the local technical pool will improve industry competitiveness: The curriculum for skill development programs needs to be revised in consultation with relevant stakeholders including industry participants, PEFMA, and relevant government bodies. Courses and trainings on lathe machine handling, winding, die development, and fitting processes should be covered under the ambit of the Fan Development Institute (FDI).

Exports of recycled raw materials must be discouraged: Regulatory duty needs to be restored on exports of recycled metals such as copper and aluminum in order to support domestic industries in the engineering sector.

Special arrangements are needed for allocating import quotas of electric sheets: Cumulative quota needs to be given to domestic fan associations (i.e., PEFMA) or the larger vendors based on estimated production capacity of SMEs so they can make energy-efficient domestic fans.

Customs duties & levies on imports need to be rationalized: Proposed duty structure can be seen in Table 29 in the report.

Review of current duty drawback rate: The fan industry had submitted calculations of Duty Drawback at 8.0% but only 4.39% was approved. Industry is requesting a review & revision.

Difficulties in export receipts needs to be addressed: A smooth foreign payment mechanism is required to facilitate and promote exports, especially in high-risk countries. After Pakistan’s inclusion in the Financial Action Task Force’s (FATF) grey list, remittances through informal channels have become difficult and the SBP needs to develop a mechanism to facilitate Pakistani exporters facing this issue.

Access to finance needs to be simplified: By reducing collateral requirements and encouraging banks to look at cashflows as a basis for financing for SMEs. In addition, the SBP needs to simplify procedures, and provide alternate Islamic financing products.

Need for greater international presence: Government needs to finance participation in international trade fairs for fan exporters to allow exporters to display products in new markets and to build business contacts. This can be funded from the EDF. The government also needs to finance trade delegations to prospective markets, with meetings arranged by commercial attaches with prospective buyers.

TERF 2.0 for upgrading technology of fan sector SMEs: The last scheme was mostly targeted at larger companies. Concessional financing under TERF will allow SMEs in the sector to upgrade their plant and machinery, improve the quality of existing products, and enter new markets and new products.

Hiring of sector specialists in key markets: Hired specialists would work under the commercial attaché at Pakistani embassies in these markets. These specialists will act as a bridge between buyers in those markets and the fan sector in Pakistan

Support in obtaining international certifications / upgradation of local laboratories: There should be utilization of export development fund (EDF) to provide subsidies in order to cover certification costs. PCSIR, Lahore can be upgraded to provide testing facilities such as LVD test, EMC test, and test for RoHS which will reduce cost, time and ensure global acceptability of Pakistani fans.

Issue of tariff parity needs to be taken up with the government of Vietnam: Vietnam has been identified as a potential market; however, China enjoys a lower tariff due to the China-ASEAN FTA. This needs to be taken up by the Government of Pakistan to seek tariff parity with China

Vendor support & development: The electricity tariff should be reduced for fan vendors on that proportion of their production which feeds into the value chains of exporters.

Extensive marketing strategies to be adopted: A national brand-building program, along with digital marketing, and exchange of trade delegations needs to take place.

Adopt emerging trends: Such as Internet of Things (IoT) technology to control the parameters (speed and ON/OFF) of DC fans and application of bio pellets (renewable energy sources) in the casting process.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 89) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk

Global Surgical Instruments Industries:

The US FDA has classified medical devices into three categories: Class I, Class II and Class III depending on their risk and criticality. Examples of Class I devices are tongue depressors, bandages, gloves, bedpans, and simple surgical devices. Examples of Class II devices are wheelchairs, X-ray machines, MRI machines, surgical needles, catheters, and diagnostic equipment. Class III devices are used inside the body and include heart valves, stents, implanted pacemakers, silicone implants, and hip and bone implants. Surgical Instruments can also be classified under two major usage categories: disposables and non-disposables.

Most of the world’s surgical instruments are made by firms in selected cities & towns in Europe and Asia—these locations include Tuttlingen (Germany), Sialkot (Pakistan), Penang (Malaysia), Debrecen (Hungary), and Warsaw (Poland).

Pakistan’s Surgical Instruments Industry:

Pakistan’s Surgical Instrument manufacturers mainly produce Class I and some Class IIb instruments.

The Surgical Instruments industry of Pakistan is a highly fragmented industry, with a strong export orientation, operating in the city of Sialkot, in the Punjab province of Pakistan. The industry consists of a multitude of small and medium sized manufacturers with a few large units. The industry mostly operates on an OEM (Original Equipment Manufacturer) model. Orders and specifications are received from buyers, mostly in Germany, UK and the USA.

Local manufacturers construct the product according to specifications and export these to the overseas buyers who usually brand the instruments and supply them to distributors overseas. Pakistan’s market share of surgical instruments has remained nearly static at 0.7 over the last 10 years suggesting a strong correlation of 0.96 with world demand.

The German SME surgical instrument manufacturers, who are the world leaders in surgical instruments, have mostly outsourced the lower technology intermediate and end products to the Sialkot cluster. While Pakistan’s surgical instruments industry remains competitive in the low-tech end of the product scale, its exports are highly concentrated in a few geographical areas primarily because of established supply chains and the difficulties involved in entering new markets.

The top 3 destinations for Pakistan’s surgical instruments are the USA, Germany and the UK. Nearly 80% of surgical instruments made in Pakistan are exported to 15 countries. This limits Pakistan’s export potential and increases concentration risk.

Major Findings:

• Our findings indicate that the surgical industry, despite being in existence for a long time, is not performing to its full potential. Compounded Annual Growth Rate from 2016-2020 was 2.6%. Despite the lack of fiscal space, the Government of Pakistan has been giving incentives to the industry to grow, however, the full development and export potential of the industry is yet to be realized. It is becoming increasingly clear that the government and industry need to come up with a joint strategy which encompasses product, process and new market development if the industry is to achieve its potential.
• Pakistan’s market share in the global trade for surgical Instruments is only 0.7%. The low market share in terms of value appears to be primarily due to the absence of continuous product & process innovations aimed at producing products which fetch higher prices in global markets.
• There is intense competition in Sialkot. Most local producers cite each other as their major international competitors. Although local rivals claim to compete based on product quality, the primary basis of competition appears to be price.
• There is an absence of stamping of Made-in-Pakistan on export products, no major Pakistan brands and hence no country-of-origin advantage. The industry is neither branding nor stamping instruments with the ‘Made in Pakistan’ label when exporting to Europe. Sometimes exporters put the ‘Made in Pakistan’ label on the carton but not on the instruments themselves.
• Buyers in the Middle Eastern market prefer to buy Pakistani instruments from US or European suppliers but not directly from Pakistan. This is because of their trust in European and American brands even though Pakistani manufacturers are OEM suppliers. Industry players in Sialkot need to appreciate the importance of brand building which can allow them to charge a premium. In addition to strong brands, country-of-origin association between Pakistan and Surgical Instruments will also facilitate Pakistani suppliers to enter new markets.
• The Pakistani Surgical Instruments industry will face a new challenge in the form of the Medical Device Regulation (MDR) to be mandatorily introduced in the EU beginning 2024. All instruments destined for the EU will have to be compliant with the new European regulations on biocompatibility. The new regulations are expected, at least in the initial period to hinder exports of Surgical Instruments to the EU.

Major Recommendations:

• There is potential for Pakistani manufacturers to enter into JVs with German or Chinese firms. The country has a population base of 220 million and approximately 2,000 hospitals, which offer a potential market for 17 million surgeries per year, these JVs can rapidly build, scale and enter export markets.
• For the upcoming MDR compliance of the EU, The Government may bring in foreign consultants for a limited time to assist in MDR compliance. Any cost of hiring consultants, building a lab etc. should be reflected in the pricing of the instruments that need compliance with MDR. If prices do not reflect the costs associated with compliance with MDR, the Pakistani taxpayers might end up subsidizing consumers in the EU.
• To improve product quality and consistency, the industry will need to self-regulate. Some options could include: provision of raw materials from a central SIMAP warehouse, SIMAP approved certification requirements for exporters, lobbying with the government to ensure that minimum export prices reflect costs of inputs etc.
• On the marketing end, Pakistan could learn valuable lessons from the Turkish “TURQUALITY” Program through which the Turkish government has been funding the development of 10 worldwide Turkish brands. A “PAKQUALITY” initiative may be promoted under the Public Private Partnership model to ensure that Pakistani brands also become regional / global icons.
• To make the product more presentable, the manufacturers may create kit packages similar to China.
• The minimum export price may only be reduced for disposable instruments, not reusable ones. To prevent misuse of the proposed change, one option could be the implementation of Global Devices Medical Nomenclature (GMDN) for identification of instruments. GMDN is a system of internationally agreed generic descriptors used to identify all medical device products.
• To diversify concentration risk, PBC has identified that the East African countries and South Africa are potential markets where TDAP may look to hold more exhibitions. Other potential markets include Canada and the ASEAN region. EDB needs to work with the Association to create awareness regarding compliance requirements in new markets, and help manufacturers comply with these requirements.
• While the Surgical Industry is proposing that the government build a new Common Facility Center, complete with the latest machinery, PBC proposes that the existing Common Facility Center may be upgraded with among others newer heat treatment furnaces, newer CNC laser cutting machines etc., and if this is not possible in the existing setup, a new CFC run by SIMAP may be set up.
• E-commerce platforms such as Alibaba, Amazon etc. may be utilized as sales channels. Sellers in other countries such as China and Vietnam use e-commerce platforms. Use of alternative sales channels also reduces over-reliance on exhibitions and commercial counsellors, many of whom are not subject experts on Surgical Instruments when dealing with foreign buyers.
• Currently, Pakistan has one of the highest documentary compliance rules compared to other countries. Increased documentation hurts business and therefore revenues. Pakistan needs to simplify its documentation process and do away with needlessly complicated bureaucratic procedures. Other nations require far less documentary compliance and as a result have less cost to export which promotes an export-friendly environment.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 89) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk

Global Trends in the Leather Garment Industry

The leather goods industry can widely be categorized into five categories; Leather Footwear, Leather Garments, Leather Gloves, Finished Leather and Other Leather Manufactures (bags, wallets, and so on). At HS-06 level, only one product – “Articles of apparel, of leather or composition leather…” (HS-420310) falls under the leather garment category.

Within the leather garment sector, Italy, India and Pakistan are the top three exporters, having exported leather garments worth $422.1 million, $320.6 million and $237.5 million, respectively, in 2020. However, global supply of such commodities has been steadily declining over the years, reaching a total export value of $2.3 billion in 2020.

Pakistan’s Leather Garment Industry

Pakistan’s leather industry, is the second largest export industry after textiles, contributing around 5.4% to exports in 2020. At HS-06 level, “Articles of apparel, of leather or composition leather…” (HS-420310) was the highest export under the leather industry, with market share of almost 28.0% which indicates the importance of leather garments in the Pakistani economy. However, Pakistan’s CAGR for the export of such garments was -4.8% for the last ten years and this declining trend can be seen since 2014.

In 2020, Germany, USA and the Netherlands were the top three export destinations for Pakistan’s leather garment exports, with market shares of 31.4%, 13.0% and 8.7%, respectively. However, exports to these destinations have declined in the last ten years. Pakistan’s leather garment exports are mainly concentrated in the European region, with a combined market share of around 80.5%. The second largest region is the America region, followed by Asia. Pakistan’s leather garment exports thus have a high concentration risk.

This report focuses on potential markets for expansion which reveals that Pakistan has the highest untapped potential worth $52.2 million for exporting leather garments to the USA. Other top potential markets include China and European countries which can be penetrated through better marketing, and participation in trade fairs and exhibitions. The country’s main competitors for these markets are India and Italy.

Comparing Pakistan’s leather garment export performance to other top competitors shows that Pakistan’s leather garment exports had a higher ten-year CAGR (-4.83%) and annual growth rate (-8.17%) than the world average. These growth rates are higher than those for both Italy and India.

The government of Pakistan provides support to the leather garment industry by exempting custom duties on imports, enhancing duty drawback rates on leather garments, decreasing regulatory duties and initiating the project of Sialkot Tannery Zone. Automation of customs procedure has also been a welcome step by the industry. However, there is still a lot of work that needs to be done before the industry is able to flourish again.

Major Reasons Identified for the Lack of Global Competitiveness

• Lack of Skilled Manpower: Shortage of trained manpower and a lack of vocational and technical training institutes.
• Lack of Supporting Industries & Heavy Dependence on Imports: Importing almost all inputs and accessories such as zips, linings, buttons, buckles, thread (Nylon and Polyester) increases lead time, costs and, makes the local leather garment uncompetitive.
• Issues in Preservation of Raw Leather: Lack of awareness about proper preservation techniques, unprofessional or inexperienced butchers, along with interrupted power and gas supply leads to excessive wastage of skins and hides.
• Lack of Certification: The LWG certification, among others, is vital for the leather industry now. However, lack of these certifications translates into important clients preferring other competitor countries.
• Need for Improving Country’s Image: Poor image of the country is reflected in the reluctance of buyers to visit Pakistan.
• Lack of Joint Ventures: JVs in the leather garment industry can help provide technical assistance to tannery and factory workers. Collaboration with foreign leather garment manufacturers would help the domestic industry access new technology & production processes, and improve labor skills, as well as boost exports.
• High Cost of Doing Business: Due to inconsistent government policies, complicated procedures and lack of transparency, cost of doing business in Pakistan is quite high.

Major Recommendations for Enhancing Competitiveness

• Development of Sector Specific Training Programs: In collaboration with the private sector, the government should develop undergraduate specialty training programs in leather garment design, sewing, and finishing including associate’s and bachelor’s degrees. Calling in foreign technicians from time to time will also help the industry grow.
• Setting up Supporting Industry: The government needs to play the role of a facilitator and incentives should be given for setting up companies for providing accessories and components for the leather and leather garment industry. Preference should be given to JVs or 100% equity by foreign firms who work with global brands.
• Improving the Leather Value Chain: Awareness on raw skin and hide preservation should be created through media houses, seminars and other such programs. Establishment of centralized slaughterhouses should take place, especially during Eid-ul-Adha where trained professionals should be employed. For this purpose, research and development should be undertaken constantly to keep up with better practices. Most importantly, uninterrupted supply of gas and electricity to such industries should be ensured, especially during the peak season of Eid, which is imperative for smooth processing of hides and skins.
• Certifications: Since LWG certification is for tanneries, the government should allow subsidies on Individual Treatment Plants installed by tanneries. Furthermore, tannery owners should be incentivized to keep their certifications updated.
• Building the Country’s Image: Appointed trade facilitators, trade counselors and other stakeholders should be properly trained to arrange more business-to-business meetings with leather garment exporters and foreign buyers. Moreover, participation in trade fairs, attention to detail on presentation of stalls, and effective communication with foreign investors needs to take place. Commercial counselors should be encouraged and incentivized to invite potential customers to Pakistani booths in international fairs.
• Promoting Joint Ventures: Pakistani ambassadors & Trade Counselors of different countries should encourage foreign investors to explore Pakistan for possible JVs and investment opportunities. For JVs to be successful, best governance practices, monitoring, tight control and check and balance exercises are vital. JVs under China Pakistan Economic Corridor (CPEC) should be looked upon.
• Lowering Cost of Doing Business: The five export-oriented sectors have been promised subsidized energy tariffs that stand at 9 cents/unit electricity and $6.5 per MMBtu for gas. This promise has not been fully honored for all exporters and the government must look into this matter promptly. In addition, these concessionary rates should be continued for the foreseeable future as fuel oil and gas tariffs play a major role in the output costs.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 88) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk