By Qudsia Bano

Pakistan's footwear industry is set for a potential boost as China's Huaxin (Shenzhen) Investment Group plans to establish 16 sports shoe production lines in collaboration with Pakistan's Forward Group, bringing prospects for greater manufacturing capacity, technology transfer and export diversification.

The cooperation agreement was signed in Islamabad on August 4 by China Huaxin Chairman Liao Yiquan and Forward Group Chairman Khawaja Masood Akhtar. The project envisages developing a footwear and apparel production base in Pakistan, with the 16 sports shoe production lines targeting an annual output of tens of millions of pairs.

The proposed investment comes as Pakistan is exporting substantially more footwear but earning less on each pair. The Ministry of Commerce data show the country exported 23.465 million pairs worth $175.65 million during FY2025-26, compared with 19.049 million pairs worth $176.48 million a year earlier.

Export volume increased 23.18%, while earnings slipped 0.47%, bringing the average unit value down from $9.3 to $7.5 per pair. The figures highlight the importance of expanding into higher-value product categories and strengthening manufacturing capabilities.

Within the sector, leather footwear exports declined 5.22% to $130.38 million, while exports of other footwear increased 19.63% to $43.64 million, indicating a changing product mix in Pakistan's footwear exports.

The proposed Chinese investment could help broaden Pakistan's presence in sports-related manufacturing beyond its established strengths. Sports goods exports increased 10.08% to $424.35 million in FY2025-26, including an 11.72% increase in football exports to $256.72 million.

At the same time, the Pakistan Economic Survey 2025-26 reported a 2.25% contraction in the broader leather products segment of large-scale manufacturing during July-March FY2026, adding to the importance of fresh investment and diversification in the sector.

Speaking to Wealth Pakistan, Ahmed Fawad Farooq, Secretary General of the Pakistan Footwear Manufacturers Association, said practical work on the proposed production lines had yet to begin, but he described the agreement as an encouraging development for the industry.

He said the scale of the proposed operation could generate significant employment while bringing Chinese production technology, technical expertise and management practices to Pakistan.

Such capabilities could strengthen the domestic industry's manufacturing base and improve its ability to compete in product segments where Pakistan currently has a relatively limited presence in international markets, he added.

Farooq also pointed to the possibility of some labour-intensive manufacturing gradually shifting from China to more cost-competitive destinations as production costs rise.

If successfully implemented, he said, the project could demonstrate Pakistan's potential to emerge as a competitive sourcing and manufacturing base for international footwear brands.

From an export perspective, Farooq said large-scale sports shoe manufacturing could help diversify Pakistan's manufactured exports and establish a stronger position in the global footwear value chain. Forward Group's expanding presence in the sector could also create opportunities for suppliers, skilled workers and related industries.

The cooperation could draw on Huaxin's manufacturing and supply-chain capabilities linked with the Chengdu-Chongqing footwear and apparel industrial cluster, creating opportunities for technology and production expertise to be transferred to Pakistan.

A Trade Development Authority of Pakistan official, who requested anonymity, also described the agreement as potentially important for broadening Pakistan's export product mix and strengthening its presence in international footwear markets.

The official said the significance of such an investment extended beyond additional production capacity, as modern export manufacturing depended on internationally competitive production systems, consistent quality, timely delivery and integration with global supply chains.

Cooperation between a Pakistani manufacturer and an experienced Chinese industrial partner could support the country's move towards larger-scale and more technologically advanced sports footwear manufacturing, the official said.

The project could generate wider benefits if Pakistani suppliers and workers were progressively integrated into its production chain. Greater local sourcing of components, development of technical skills and transfer of production and management expertise could increase domestic value addition and allow supporting industries to grow alongside the new capacity.

The official said sustained export gains would ultimately depend on the implementation of the project and its ability to secure international buyers. If successfully developed, the 16 production lines could combine Chinese technology and manufacturing expertise with Pakistan's competitive production base, helping the country expand into higher-value sports footwear and strengthen its position in global footwear supply chains.

Credit: INP-WealthPk