Footwear exports to reach $1b by 2027

Association chief says industry has significantly cut its import share in recent years

LAHORE:

Pakistan’s footwear industry is in a position to increase its exports to $1 billion by 2027, said Pakistan Footwear Manufacturers Association (PFMA) Chairman Zahid Hussain. He underlined that the industry was probably the only sector which had reduced its import share drastically in the past three years. In an interview by The Express Tribune, Hussain highlighted that the sector’s domestic production had increased by 50% in the past three years mainly owing to import substitution.

He pointed out that footwear imports had gone down to just 1.6 million pairs from 26 million pairs four years ago. “The target of exports worth $1 billion is not something out of the hand and is very much doable, keeping in view the growth of footwear sector in recent years,” he maintained. “We are hopeful that we will achieve this target by 2027, by adding more export markets like China,” he emphasised.

The industry’s exports currently stand at around $130 million (16 million pairs) and its main markets are the United States, United Kingdom, European Union and Australia. Owing to the rising demand in global markets, “we are eyeing the AsiaPacific market and are likely to start exports to China by 2025,” he said. “Pakistan is currently manufacturing around 300 million pairs per annum.” Hussain revealed that some big groups were in the process of establishing new manufacturing units for exporting their products. The government realised the potential of footwear sector and provided incentives by reducing import duties on almost 40 raw materials and intermediate goods, he cherished.

“The ‘Make-in-Pakistan’ policy has started giving results,” he stressed. Giving an example, Hussain said that the smartphone and footwear sectors had reduced their imports due to domestic manufacturing. “Their exports have also started increasing,” he underlined. “We have got everything in our supply chain including manpower,” he said, adding that raw material was the only area where the industry needed government’s support. “Government has responded positively and Pakistani manufacturers are ramping up exports,” he said.

The reduction in import duties enabled the raw material importers to effectively establish their supply chain, which supported import substitution over the next three to four years, he elaborated. “The shift has now gone towards manufacturing in Pakistan.” Talking about the past, Hussain lamented that the industry missed some opportunities in the past, as the sector was unable to align with previous governments on exportrelated matters. “Things are on a different track now.” Yet, there were some issues that needed to be addressed, he added. Hussain maintained that the government should give proper reasons before imposing certain taxes.

The government wants to collect taxes which “are now more than the income of a business”. “This cannot work,” he exclaimed. “If the government wants to collect taxes aggressively, then it has to show that it is better or equal in competitiveness with regional countries,” he underlined.