Pakistan’s Textile Industry: Compliance, Challenges, And Transformation – OpEd

Key Takeaways:

• While advocacy groups highlight labour rights concerns in Pakistan’s textile industry, recent ILO data shows high compliance in export-oriented factories, with only small percentages failing minimum-wage and overtime standards.
• Leading manufacturers are investing heavily in worker welfare, gender equity, disability inclusion, healthcare, training, and community programs, aligning operations with international sustainability and labour frameworks.
• Sustaining and expanding these reforms is both an ethical priority and an economic necessity to maintain preferential market access under schemes like the EU’s GSP+ and to strengthen buyer confidence.

Pakistan’s textile industry, a backbone of its economy and a major source of foreign exchange, has often been criticized for labour rights violations. Advocacy groups such as the UK-based Label Behind Labour have alleged systemic wage violations, forced overtime, and a culture of fear within garment factories. These allegations raise serious concerns, but they do not capture the full picture. Recent compliance reports and industry practices show that Pakistan’s textile sector is shifting toward greater alignment with international labour, environmental, and sustainability standards.

Compliance and Buyer Confidence

The International Labour Organization (ILO) Better Work Pakistan Synthesis Report (2022–2025) presents a more balanced perspective on compliance within the textile sector. It indicates that export-oriented factories show high levels of compliance, with only 4.6 percent failing to meet minimum wage standards and 2.3 percent not complying with overtime payment regulations in 2025. These figures imply that while violations do occur, they are isolated incidents rather than systemic issues.

This progress is significant as global buyers are increasingly prioritizing traceability and accountability in their sourcing decisions. Confidence in Pakistan’s textile sector is growing, with 33 percent of surveyed international buyers indicating plans to increase their sourcing from the country over the next two to three years.

Pakistan’s compliance efforts are also linked to the European Union’s Generalized Scheme of Preferences Plus (GSP+), which provides preferential trade access in exchange for adherence to international conventions on human rights, labor rights, and governance. Maintaining compliance is not just an ethical obligation; it is crucial for securing Pakistan’s position in global markets.

Labour Welfare and Community Initiatives

Leading exporters are prioritizing compliance and worker welfare in their operations. Interloop Limited has set high standards for gender equity, with 44% of its board members being women and 25% in executive leadership roles. The company has awarded over 650 scholarships and operates mobile health clinics for communities involved in cotton farming. 

Gul Ahmed enforces strict labor governance frameworks, which include policies for preventing child and forced labor, anti-discrimination codes, and whistleblowing mechanisms. Its future goals include increasing female workforce participation to 15% by 2026 and creating 1,500 new jobs supported by digital training platforms.

Soorty Enterprises promotes inclusive employment through its PRISM Project, which trains individuals with hearing and speech disabilities. The company’s healthcare initiatives include a psychiatric institute with 120 beds and pediatric centers that serve 40,000 patients annually. 

Nishat Mills emphasizes equal opportunity employment and occupational safety, making significant investments in training and working to reduce the gender pay gap. Liberty Mills demonstrates strong community commitment by employing 200 differently-abled individuals, supporting rehabilitation programs for 1,500 children, and providing healthcare services to over 1.4 million patients each year.

Other companies also exemplify this transformation. Feroze1888 Mills invests in training and reports zero complaints related to breaches of customer privacy. Crescent Bahuman provides housing, healthcare, childcare, and scholarships, while partnering with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Pakistan to enhance women’s leadership pathways. Kamal Limited collaborates with government agencies to provide ration cards and conducts safety drills with Rescue 1122. Riaz Textile Mills emphasizes ethical operations, while Gohar Textile Mills offers welfare measures such as free transportation, subsidized food, and medical treatment, adhering to the Occupational Health and Safety Assessment Series (OHSAS) 18001 standards.

Diamond Fabrics integrates sustainability into its labor practices and has been recognized as the “Best Place to Work” in Pakistan’s textile industry. Sapphire Finishing Mills follows the Higg Facility Environmental Module (FEM) and Facility Social and Labour Module (FSLM) frameworks, promoting ethical sourcing and fair labor practices while employing over 150 deaf individuals in collaboration with the Deaf Reach Programme. Masood Textile Mills enforces Environmental, Social, and Governance (ESG) and Corporate Social Responsibility (CSR) systems, integrates European Union due diligence frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), and runs adult literacy and inclusion programs. 

Utopia Industries prioritizes occupational health and safety by enforcing the use of personal protective equipment (PPE), adhering to machinery protocols, and running cardiopulmonary resuscitation (CPR) awareness campaigns, while also promoting women’s empowerment and disaster relief initiatives.

Challenges and way forward

The scope of these initiatives challenges the narrative of systemic exploitation in Pakistan’s textile sector. While advocacy reports raise valid concerns, they often overlook the structural reforms that have been integrated into the industry. Although the textile sector is not perfect—like any global supply chain—it is evident that there is a trend toward greater transparency, inclusivity, and sustainability.

This transformation is also strategic. Pakistan benefits from the European Union’s GSP+ framework, which provides preferential trade access in exchange for compliance with international conventions on human rights, labor, and governance. Ensuring and enhancing this compliance is not just an ethical obligation; it is essential for economic survival in a competitive global market.

However, challenges persist. Small and medium-sized enterprises often lack the resources to implement comprehensive compliance systems. It is crucial to strengthen enforcement mechanisms to ensure that isolated violations do not undermine broader achievements. Although gender equity is improving, systemic support is still needed to break cultural barriers and expand opportunities for women in the industry. International buyers also play a vital role; their willingness to reward compliance with long-term sourcing commitments can encourage further reforms. On the other hand, punitive disengagement can damage progress by weakening the very actors who are striving to improve standards.

Pakistan’s textile industry is at a pivotal moment. While allegations of exploitation cannot be ignored, the significant advances made in compliance, worker welfare, and sustainability must also be recognized. Leading exporters are integrating international standards into their operations, investing in communities, and creating inclusive workplaces. The challenge now is to scale these reforms throughout the entire sector, ensuring that progress becomes the norm.

This is not merely a story of denial; it is a story of resilience, reform, and responsibility. Pakistan’s textile industry is moving beyond allegations toward a future defined by compliance and sustainability.