The Pakistan government has told the World Trade Organization (WTO) that it will proactively seek foreign direct investment (FDI) for its clothing and textile sector as it seeks to leverage its GSP+ preferential trade access to the European Union (EU).

In a statement following the conclusion of a WTO trade policy review on Pakistan, Islamabad said: "The textile sector can attract local investment in the country after the GSP-plus status given by the EU."

Improvements to the country’s textile finishing and energy sectors especially, will be welcomed by a textile and clothing sector hampered by unreliable power suppliers and some weak backward linkages.

A detailed WTO report following the review explained: "The manufacturing sector has particularly suffered from power cuts and high electricity prices. As a consequence, many producers have opted for alternate sources of energy such as captive power plants and diesel-run generators."

On FDI, the WTO stressed Pakistan’s ‘Foreign Direct Investment Strategy 2013-17’ aims to facilitate inward investment, especially with its Board of Investment being a "one-stop shop" helping investors. Textile and clothing manufacturing is a priority under the programme, which includes asking investors to funnel finance though Special Economic Zones (SEZs) attracting government support and fiscal benefits.

The report stressed that the Pakistani government wanted to increase net FDI to US$5.5bn in 2018. It noted that textiles and clothing make up more than 50% of Pakistan's merchandise exports, and under its new textile policy (2014-19), the government "aims to further promote high value-added activities and improve productivity in the subsector."