Foreign Direct Investment (FDI) in Pakistan's textile and apparel sector increased by 26% to US$59.4m during financial year 2007, compared with US$47m last year.

The majority of the investments were made in textile dyeing and finishing, textile machinery assembly/manufacturing, apparel accessories manufacturing, manufacturing of stitching machine accessories and other apparel manufacturing support services. 

Apparel and textiles is a fast growing sector in Pakistan, especially after the end of quotas in January 2005. The sector contributes over 60% to export receipts, and over 38% to manufacturing sector employment in the country.

Pakistan has been offering number of incentives to attract FDI in the sector by creating special economic zones, industrial estates, textile and garment cities and parks, and providing an effective regulatory framework for investors in the apparel sector.

The country also provides relatively strong protection for foreign investors, ranking 19th worldwide on protecting investors, according to a World Bank report on Doing Business In South Asia 2007.

By Ahmed Abdullah.