South Asia Investor Review

President Donald Trump's announcement of "reciprocal tariffs" has shocked the world. Nations and corporations were all expecting the US to increase tariffs but the scope and scale have caused severe tremors in the global economy.  There's a base level of 10% tariffs on all trading partners. Imports from China (54%), Vietnam (46%), Bangladesh (37%), Pakistan (29%), India (26%), Japan (24%) and the European Union (20%) are all subject to higher tariffs. Even the poor African nation of Lesotho (GDP: $2.5 billion) has not been spared. It is now subject to a 50% tariff on the jeans it exports to the United States.  Trump's Reciprocal Tariffs. Source: CNBC The charts showing President Trump's claimed tariffs on US imports by other countries have no resemblance to reality. For example, the US Commerce Department claims Pakistan imposes a 58% tariff on imports from the US. Pakistan's trade weighted average tariffs on the US goods were  7.3%  compared to 9.9% that ...

Pakistan is moving to higher value-addition in textile sector with branding. Khaadi, Gul Ahmed, J. by Junaid Jamshed, Sapphire, Sana Safinaz and others growing into global brands by expanding into countries with large Pakistani diaspora. Other Pakistani companies that have gained international brand recognition include Shan Masala, Pakola, Tapal Tea and K&N Frozen Foods. These companies are helping boost much needed exports to narrow Pakistan's growing current account deficits .  Pakistani Global Brands. Source: Pakistan & Gulf Economist As the Pakistani diaspora has grown to nearly 10 million in recent years, several Pakistani clothing and food brands have entered markets in the United States, United Kingdom, European Union and the Middle East. These markets create opportunities to build more Pakistani global brands, create jobs and grow Pakistan's exports .  Khaadi Store, Package Mall, Lahore, Source: Wikimedia Khaadi , which specializes in women's apparel, has ...

Pakistan exported $38 million worth of denim clothing to the United States in July, 2021. This figure represents 140% growth over July, 2020. Mexico's denim exports grew 58% while those of Bangladesh grew 24% in this period, according to the US Office of Textiles and Apparel.  US Denim Apparel Imports. Source: US Office of Textiles and Apparel Among the top Asian suppliers, Pakistan's exports to US jumped 62.16% year to date to $188.94 million. Bangladesh’s exports increased 42.82% to $362.38 million in this period while shipments from China were up 13.28% to $192.49 million.  Pakistan’s textiles and clothing exports are expected to rise in the coming months as the US moves orders out of China and other neighboring Asian countries. The focus on more value addition and new textile policy of the country will support the organic growth in exports. The depreciation of PKR has also boosted textile exports. The monthly average of apparel exports from Pakistan was $565.60 million in ...

Pakistan's textile and  garment exports  jumped 22.94% to reach $15.4 billion in Fiscal Year 2020-21, according to data from Pakistan Bureau of Statistics.  At the same time, the country's  technology exports  surged 47% to set a new record of $2.12 billion for the last fiscal year that ended in June 2021. Pharmaceutical exports also saw 25.3% growth to $241 million in first 11months of FY 2021, indicating Pakistan's export diversification with higher value added goods and services.  Pakistan Textile/Apparel Exports. Source: Arif Habib Ltd Pakistan Textile Exports FY 2006-2021. Source: APTMA Overall, Pakistan's exports of goods for fiscal 2020-21 rose 13.7% to $25.63 billion. The nation's service exports increased 9.2% to $5.93 billion in fiscal 2021. Combined exports of goods and services added up to $31.56 billion in July 2020 to June 2021 period.  Pakistan Tech Exports. Source: Arif Habib Ltd.  Imports grew 23.2%, much faster than exports as t...

Jesper Brodin, CEO of Holland-based Ingka Group, started his 25-year career working for Ikea in Karachi, Pakistan in 1995. Ikea does not operate its stores in Pakistan but the company sources home textiles from the South Asian country. Today,  Ikea is a major global retailer of home furnishings with worldwide sales of over $40 billion. Like any other major retailer, it is responding to its customers' demand for products produced in a sustainable way in terms of their impact on the environment and the people involved in the supply chain.  Ikea CEO Jesper Brodin. Source: Financial Times Who is Jesper Brodin? Jesper Brodin is the chief executive officer (CEO) of Ingka Group that owns IKEA, a global retail sores chain with worldwide revenue of over $40 billion. He was born in Gothenburg, Sweden.  Brodin started his career as IKEA's purchasing manager in Karachi, Pakistan in 1995. Speaking to Bloomberg TV recently, he said he learned after being hired that he was the only appl...

Pakistan’s IT exports increased by 44% during the first quarter (July, August and September) of the fiscal year 2020-21, according to a tweet by Razzak Dawood, Special Assistant to Prime Minister Imran Khan. Pharmaceutical exports saw 22.6% increase in the same period over last year.  Pakistan's information technology and pharmaceutical exports are soaring by double digits amid the COVID pandemic, much faster than the overall exports.  Razzak Dawood on IT Exports Technology Exports:  "I am glad to note that our exports of Telecommunication & IT Services have done very well during the period Jul-Sep of this Financial Year (FY). The exports have grown by 41% to USD 444 million as compared to USD 315 million in the corresponding period in the last FY", Mr. Dawood tweeted today .   In Fiscal Year 2019-20 ending in June, 2020, the Information Telecommunication (IT) and IT enabled Services (ITeS) export remittances surged 23.71% to $1.230 billion from $994.848 millio...

With several major brands moving production to Pakistan amid the COVID19 pandemic, the country's exports have grown at a faster pace than those of Bangladesh and India, according to  Bloomberg News . Pakistan's total textile shipments rose 7% in September, compared with India’s 6% and  Bangladesh’s 3.5%.  South Asia Region's Exports. Source: Bloomberg “Pakistan has seen orders shifting from multiple nations including China , India and Bangladesh ,” said Shahid Sattar, secretary general at the All Pakistan Textile Mills Association, in an interview with Bloomberg's Faseeh Mangi. “Garment manufacturers are operating near maximum capacity and many can’t take any orders for the next six months.” Pakistan's Textiles Growth. Source: Bloomberg Bloomberg attributed Pakistan's export surge to Prime Minister Imran Khan’s administration  to be the first in South Asia  to ease the COVID19 lockdown after controlling the spread of the disease. It helped draw companies like...

Pakistan government has decided to permit hemp farming for industrial and medicinal use, according to Mr. Fawad Chaudhry, Minister of Science and Technology. Initially, the government will control hemp production, Chaudhry said, but private businesses and farmers will be allowed to enter the market at a later date, according to the  French news agency AFP . Hemp ( بھنگ ) plants grow wild like weeds in many parts of Pakistan, particularly in Potohar region where the nation's capital Islamabad is located. Hemp is one of the oldest plants on record as having been used to benefit humans. Hemp is known to have at least 50,000 different uses.  In South Asia, people have been cultivating hemp to make ropes and bags and to smoke hashish for centuries. The government has picked International Center for Chemical and Biological Sciences (ICCBS) to help regulate hemp products in Pakistan, according to  HempToday , a publication that covers the hemp industry. Locate...