weighted score 4.3 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Pakistan
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Pakistan as a sourcing destination.
Labour cost competitiveness
8
Among the lowest manufacturing wages globally — comparable to Bangladesh. Strong cost advantage in textile, garment, and leather sectors.
Supply base depth
4
Strong textile and garment cluster. Significant in surgical instruments and leather goods. Limited diversification beyond these sectors.
Logistics & infrastructure
3
World Bank LPI ranks Pakistan ~122nd. Karachi port congestion, unreliable power grid with frequent load-shedding, weak road and rail networks.
Workforce skills
4
Low literacy rate (~58%), tertiary enrollment ~10%, weak STEM graduate output. Some technical expertise in textile manufacturing and surgical instruments.
Scalability
7
EU GSP+ status grants zero duty on ~66% of tariff lines — very favorable preferential access. Conditional on compliance with 27 international conventions.
Ease of doing business
2
Extremely complex customs, frequent policy changes, weak contract enforcement. Power outages add operational cost. Among the most challenging business environments in this index.
Trade access & tariffs
3
Very low R&D spending (~0.2% of GDP). Minimal patent output. Limited technology adoption in manufacturing outside top-tier exporters.
Sustainability baseline
2
Negligible EcoVadis coverage. Minimal ISO 14001 certification. Very weak ESG culture across supply base.
Innovation & IP
7
240 million population with very young demographics (median age 22). Large available labour pool though constrained by infrastructure and power supply.
Quality standards
3
Very low ISO 9001 density per manufacturing employee. Quality culture limited to top-tier exporters in surgical instruments and premium textiles.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage levels
- Pakistan's manufacturing wages remain among the lowest in Asia — below Vietnam and comparable to Bangladesh. The textile sector in Punjab and Sindh provinces benefits from deep labour pools and established piece-rate structures.
- GSP+ advantage
- EU GSP+ status (renewed 2024) grants zero duty on approximately 66% of tariff lines. This preferential access is conditional on compliance with 27 international conventions covering human rights, labour, environment, and good governance.
- Infrastructure constraints
- Frequent power outages (load-shedding) add 15-25% to effective production costs through generator fuel and lost productivity. Gas supply interruptions affect industries dependent on continuous heat processes (ceramics, glass).
- Currency effect
- The Pakistani rupee has depreciated significantly against the euro since 2022, increasing effective cost competitiveness for EU buyers beyond what the static score captures.
Supply Base & Sector Focus
Supply Base & Sector Focus
- Textile cluster
- Pakistan is the world's 4th largest cotton producer. Vertically integrated textile supply chains in Faisalabad and Karachi cover spinning, weaving, dyeing, and garment manufacturing. Strong in denim, home textiles, and basic knitwear.
- Surgical instruments
- Sialkot is a global hub for surgical and dental instruments — estimated 20% of global market share. Highly specialised cluster with decades of accumulated expertise.
- Leather goods
- Significant leather tanning and finished goods capacity in Karachi and Kasur. EU is a major destination market for Pakistani leather products.
- Diversification limits
- Outside textiles, surgical instruments, and leather, Pakistan's manufacturing base is shallow. Electronics, automotive, and chemicals supply chains are underdeveloped compared to regional peers.