Amir Jahangir
Pakistan’s textile and garment industry stands at the centre of the country’s economic identity. It contributes approximately 8.5 per cent of GDP, supports millions of direct and indirect livelihoods and generates more than 60 per cent of national export earnings. Clothing, hosiery, denim, home textiles and athletic wear produced in Faisalabad, Karachi, Lahore and Sialkot are sold by major brands across Europe and North America.
This global footprint creates opportunity but it also brings scrutiny. International advocacy organisations have raised concerns about wage violations, excessive or involuntary overtime, weak grievance mechanisms and the limitations of conventional social audits. Such allegations cannot simply be dismissed as hostile criticism. Wherever labour-rights violations occur, they harm workers and expose wider industry to reputational, commercial and regulatory consequences.
However, it would be equally misleading to portray Pakistan’s export-oriented textile sector as uniformly non-compliant. The ILO Better Work Pakistan Synthesis Report for 2022–2025 found that among the factories assessed in 2025 only 4.6 per cent were non-compliant on minimum wages and 2.3 per cent on overtime payments. These shortcomings require attention but the findings do not support the claim that labour violations define the entire industry.
The reality is more complex. Compliance gaps persist, particularly across an extensive supply chain containing contractors, subcontractors and smaller production units. At the same time, many leading exporters are investing substantially in labour governance, worker welfare, inclusion, environmental performance and supply-chain traceability.
Pakistan’s problem is therefore not simply a lack of action. It is also the absence of a credible, locally owned architecture for measuring, verifying and communicating that action.
Most established exporters already prohibit forced labour, child labour, harassment and discrimination. They undergo buyer inspections, maintain workplace-safety systems and operate grievance mechanisms. The difficult question is whether these policies are consistently implemented, independently verified and extended throughout their supply chains.
Social audits themselves face growing criticism. Short inspections, limited interviews and reliance on employer-supplied records can overlook problems that are widely known on the factory floor. Compliance cannot therefore, be reduced to certificates displayed in corporate offices. It must become part of operational management, worker relations, purchasing decisions and board-level accountability.
This challenge is becoming more urgent as the international regulatory environment changes. European sustainability reporting and due-diligence requirements are increasing the pressure on companies to document the labour and environmental performance of suppliers. Pakistani exporters that cannot produce structured, verifiable evidence may not face an immediate legal sanction. They may instead encounter something quieter; exclusion from preferred-supplier lists by international procurement teams seeking to reduce regulatory risk.
The industry already possesses examples of good practice. Interloop has achieved significant representation of women on its board and in executive leadership, provided more than 650 scholarships and introduced mobile health services for women, children and cotton-growing communities.
Gul Ahmed has established policies on forced and child labour, discrimination and harassment, supported by whistleblowing, grievance and supply-chain due-diligence mechanisms. Soorty Enterprises has trained people with hearing and speech disabilities and supports healthcare programmes serving thousands of children.
Sapphire Finishing Mills applies recognised environmental and social performance frameworks and has created employment opportunities for more than 150 deaf individuals. Masood Textile Mills has incorporated ILO and Better Work principles into its management and supplier-assessment systems. Liberty Mills, Crescent Bahuman, Kamal Limited and other major manufacturers have also invested in healthcare, education, inclusion, emergency preparedness, occupational safety and employee development.
These initiatives are commercially relevant, measurable and increasingly aligned with international expectations. Yet they remain fragmented. Pakistan lacks a mechanism capable of converting individual company performance into credible, comparable evidence about the sector.
A possible answer is the creation of the Pakistan Textile 100 Index; an independently governed annual assessment of the country’s leading textile companies. The Index would evaluate businesses across five interrelated areas; financial and export performance; human-resource and labour practices; environmental sustainability; corporate governance; and compliance with GSP+ and international due-diligence requirements.
Such an index would serve three purposes.
First, it would generate evidence. Companies would be assessed against published indicators covering wages, working hours, occupational safety, worker representation, emissions, water consumption, chemical management, governance and supply-chain oversight. Wherever possible, claims would be verified through documentation, worker engagement and independent review rather than accepted through self-reporting.
Second, it would create recognition. A credible certification could support buyer onboarding, export tenders, ESG disclosures, trade missions and sustainability-linked financing. Companies performing well would possess an independently verified asset that could be used in international markets.
Third, it would improve Pakistan’s external narrative. Annual rankings and published findings would allow buyers, regulators, investors and journalists to evaluate the industry through structured evidence rather than isolated allegations or corporate publicity.
For such an initiative to be credible, however, independence must be protected. Participation fees may help make the system financially sustainable but companies cannot be allowed to purchase favourable ratings. The methodology must be public, scoring should be evidence-based, assessors must disclose conflicts of interest and results should be subject to independent review. Worker representatives, labour experts, environmental specialists and governance professionals must have meaningful roles in oversight.
The Index should also recognise differences in company size without diluting standards. Large integrated exporters, mid-sized manufacturers and emerging companies do not possess equal resources. Participation can therefore be organised in separate categories, while fundamental requirements concerning wages, safety, forced labour, child labour and non-discrimination remain universal. International brands must also accept responsibility. Buyers cannot demand world-class compliance while imposing prices and deadlines that undermine it. Responsible sourcing requires purchasing practices that make lawful wages, safe working conditions and reasonable hours commercially possible. The Government of Pakistan, industry associations, trade unions and major exporters should now collaborate on a nationally credible compliance framework. Smaller manufacturers will require technical assistance to meet increasingly complex standards. At the same time, the best-performing companies must help establish benchmarks that encourage improvement across the sector.
Pakistan’s textile industry has already shown that responsible production and export competitiveness can reinforce each other. What it lacks is the architecture to make that progress visible, comparable and trusted.
The future of Pakistan’s textile exports will be secured by producing evidence strong enough to withstand scrutiny. A transparent, independently governed Pakistan Textile 100 Index could give the industry the means to improve its performance, and, finally, to own its compliance story.
—The author is a public policy expert and heads the country partner institute of the World Economic Forum in Pakistan. He can be reached at [email protected]
