KARACHI: Pakistan’s leather industryone of many nation’s signature export sectors, is shedding floor even because it pulls in tons of of thousands and thousands of {dollars} a 12 months and employs roughly half 1,000,000 employees, in response to a coverage observe launched by the Institute of Price and Administration Accountants of Pakistan.
The report, issued by ICMA’s Analysis and Publications Division, discovered that leather-based exports have fallen sharply from their peak, at the same time as world patrons demand stricter environmental and labor compliance and delivery prices climb.
Leather-based exports, together with uncooked hides and completed items, totaled about $804 million in 2025, down from a peak of roughly $1.29 billion in 2014, the report mentioned.
The sector’s share of Pakistan’s whole exports has slipped from greater than 6% in 2005 to only 2.6% final 12 months.
Month-to-month figures present the pressure: Central financial institution knowledge cited within the report present leather-based exports dropped to $68 million in February from $73.8 million in January, a decline the report attributes to rising prices and compliance hurdles moderately than falling demand alone.
The report attracts a distinction between two components of the business which can be transferring in reverse instructions. Exports of uncooked hides and skins have collapsed, falling from $317.7 million in 2006 to $135.9 million in 2025.
Completed leather-based items together with attire, baggage, footwear and comparable gadgets have held up much better, at $668.1 million final 12 months, primarily flat in contrast with twenty years in the past.
The report concludes that Pakistan’s aggressive benefit lies in completed merchandise, not uncooked materials, and that failing to put money into processing capability dangers squandering that edge.
A lot of the uncooked materials passes by means of the nation in a matter of days every year throughout Eid al-Adha, the Muslim pageant that includes the ritual slaughter of livestock. This 12 months, the report says, roughly 7.47 million animals had been sacrificed nationwide, producing hides and skins value an estimated 8.67 billion rupees.
However the report says poor dealing with together with delayed salting, insufficient storage and weak transportation mixed with casual, untraceable assortment networks means a big share of that materials by no means reaches formal tanneries in usable situation.
The observe additionally factors to a mixture of world and home pressures squeezing exporters. Rerouted delivery following disruptions close to the Purple Sea has lengthened supply instances and raised freight prices, the report says, whereas Brent crude oil costs climbed from about $72 a barrel in January to greater than $124 in April, pushing up vitality and transport prices throughout the provision chain.
Domestically, the report cites persistently excessive inflation, elevated borrowing prices tied to the State Financial institution of Pakistan’s coverage fee, and delays in gross sales tax refunds and obligation downside funds as additional strains on exporters’ money circulation.
To reverse the decline, ICMA proposes a two-track roadmap. Within the close to time period, the group requires a nationwide cover preservation marketing campaign timed to Eid al-Adha, sooner clearance of tax refunds, focused aid on imported tanning chemical compounds and equipment, and a single authorities facilitation desk to chop by means of overlapping rules.
Long term, the report recommends constructing a proper, traceable provide chain linking slaughterhouses, collectors, tanneries and exporters; establishing “inexperienced” leather-based clusters with shared wastewater therapy; and pushing into new markets within the Gulf, East Asia and non-traditional European locations to scale back reliance on the USA, United Kingdom and a handful of European patrons that at the moment dominate Pakistan’s leather-based export markets.
The report factors to Vietnam, Bangladesh, Turkey and several other developed economies as fashions, noting that international locations which formalized cover assortment and tied commerce agreements to export progress fared higher than those who didn’t.
“This isn’t an issue of assets however of execution,” the report concludes, arguing that Pakistan has the livestock base, workforce and manufacturing capability to compete globally however lacks the coordinated coverage execution to transform that potential into export earnings.
