Relocation Barriers, EU Compliance Gaps and Labour Issues Hampering Punjab Garment Industry: PHMA

By Muhammad Shahzad
LAHORE: The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has urged the Punjab government to comprehensively revise its industrial estate policy for the garment sector, warning that existing regulations are hindering industrial relocation, investment efficiency and export-led growth.

Addressing a meeting of the PHMA Executive Committee, PHMA Zonal Chairman Abdul Hameed said industrial parks were established to promote exports and facilitate manufacturing, but several practical challenges were limiting their effectiveness.

He said the current policy requiring investors to install entirely new machinery when relocating factories to industrial estates is unrealistic. Many garment manufacturers already possess installed production capacity, while a considerable portion of machinery remains underutilised due to fluctuating demand and rising production costs.

“Forcing manufacturers to purchase new machinery for relocation places an unnecessary financial burden on businesses and discourages investment in industrial parks,” he said.

Abdul Hameed called for a structured relocation policy allowing existing manufacturing units to shift operations into designated industrial estates without mandatory replacement of machinery. Such flexibility, he said, would improve capacity utilisation, reduce capital wastage and accelerate industrial clustering in export-oriented zones.

He also expressed concern over inadequate compliance infrastructure in industrial estates, including Sundar Industrial Estate and Quaid-e-Azam Business Park.

According to him, international buyers—particularly in the European Union—now require strict compliance throughout the value chain, covering environmental standards, labour practices, chemical management and production transparency. Dyeing and processing units, he noted, face especially stringent scrutiny under evolving EU regulations.

Representatives of the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) supported these concerns and called for stronger involvement of industry bodies in policymaking related to industrial parks and export facilitation.

They also proposed integrating the Ministry of Commerce’s compliance centre with garment industrial parks across Punjab to provide technical assistance and ensure consistent regulatory compliance, thereby improving exporters’ readiness for international markets.

Former PHMA Chairman Shafiq Butt said Pakistan’s industrial estates have historically suffered from weak implementation and poor coordination between government institutions and industry. Without embedding compliance systems into industrial park operations, he warned, these zones would continue to underperform.

Former PHMA Chairman Shehzad Azam Khan highlighted labour shortages in remote industrial estates and recommended transport services and residential colonies for workers to ensure a stable workforce. He also called for a formal compliance code of conduct jointly developed by the government and industry stakeholders.

During the meeting, PRGMEA representatives also expressed concern that some plots in Quaid-e-Azam Industrial Park were reportedly being used for real estate trading instead of manufacturing, undermining the objectives of industrial development.

Concluding the discussion, Abdul Hameed warned that unless machinery relocation policies, compliance infrastructure, labour facilitation and land-use enforcement are addressed, Punjab’s garment industrial estates will continue to fall short of their export potential despite substantial public investment.

He urged coordinated action involving the Punjab Industrial Estates Development and Management Company (PIDMC), the Ministry of Commerce’s compliance centre and industry associations to strengthen Pakistan’s export-oriented industrial growth.