Cottage and Small Scale Industries in Pakistan

In Pakistan cottage or household industries hold an important position in rural set-up. Most villages are self sufficient in the basic necessities of life. They have their own carpenters, blacksmiths, potters, craftsmen and cotton weavers. Many families depend on cottage industries for income.
Cottage industries have also gained immense importance in cities and towns. There is great demand for hand-woven carpets, embroidered work, brassware, rugs and traditional bangles. These are also considered important export items and are in good demand in international markets.

Types of cottage and small-scale industries in Pakistan

There is a web of cottage and books industries. In almost every village, there are a number of such industries depending upon the size of the village and the demand for the products. The establishment of such industry is closely related t the availability of raw material traditional skills, climatic conditions and, in several cases, the local specialization in the organized factory sector.
There is a large variety of handicrafts available in Pakistan. They are not only aesthetically pleasing items, but they are also serve the needs of local people.
Some of these industries produce important export items. Recently exports of non-cotton products have faced increasing trade barriers as public opinion in industrialized countries has expressed growing concern about child labor, environmental and health standards. These concerns are being addressed now.


Carpets are by far the most in economic terms and the make a significant contribution to export earnings. They are generally hand-woven and hand knotted and made of wool, silk or a mixture of the two.


Textiles are found throughout the country with a variety of design and techniques. The most famous among them are Khaddar, Susi, Khes, Chunri,Boski, Karandi, Shaal, and Ajrak. The designs are invariably brightly colored with traditional emphasis on blue and red.


Embroidery has developed to a fine art with distinctive regional designs and patterns.


Gold and silversmiths are one of the largest communities of craftsmen. Much of the jewelry made and sold in the cities is intricately fashioned and delicate.


Clay and terracotta pottery and utensils continue to be of great practical importance. Many of the designs of urns, pitchers, bowls, jugs, plates, and pots seen today are almost identical to those un covered at archaeological sites around the country. Distinctive glazed blue tiles are used to decorate many of the great mosques in Pakistan.


Wazirabad is the city of cutlery industry in Pakistan . This industry is growing day by day and has share of 65 million US dollars in Export for 2010. High Quality Damascus Steel ( Pattern Welded Steel ) is manufactured in this city and 95% of world needs are produced here.


The Swat Valley is perhaps the most famous for its intricately carved architectural woodwork and furniture, although wood-carving is common throughout the northern mountains.

 Sports Goods

Sports goods earn about 3.7% of our total exports. The main raw material for the sports goods industry are leather and mulberry wood that are available in Punjab, but also imported PVC. Football, hockey ball, hockey sticks, cricket bats and rackets are mostly manufactured by hand. The skilled workers are available in Sialkot and Lahore. In the industry large and medium size factories contract work out to small scale and cottage concerns.

 Surgical Instruments

Sialkot and Lahore are also noted for the manufacture and export of surgical instruments. The most important raw material is stainless steel which has to be imported. In this industry, also, medium scale factories contract work out to small scale and cottage concerns. Also like the sports goods industry, most of the output is exported.

 Other small-scale industries

Other small scale industries include electric fans, cutlery and general engineering.

 Problem of cottage and small-scale industries

Cottage and small-scale industries contribution to the GDP is only 5%. There are certain problems associated with these industries that are mentioned below.
  • Profits are limited and they are mostly spent on the daily expenses of the owners. They do not have extra capital for expansion of these industrial units.
  • Economies of scale are not available so production cost is higher. Goods produced in small-scale industries cannot compete in open market if the same goods are manufactured on a large scale.
  • There is a lack of standardization and quality control. In some cases they do not meet the standards of foreign markets. A lack of coordination between different industries also creates differences in prices.
  • Production methods and machinery are outdated because the investors in small-scale industry are illiterate and poor.
  • The wholesaler, who takes most of the profits, exploits the owners of the small-scale industry. In some cases goods are sold to wholesalers at cost price, which discourages the owners and they reduce the quality and quantity the produced.
  • In rural areas, where the electricity is not provided, small-scale industries are difficult to set up. Even the great fluctuation in voltage and power break-downs cause damage to the electric motors. The commercial rates of electricity have also increased significantly which hinders the growth.
  • The craftsman and artisans learns their skills and production methods from their elders. The provision of technical advice and further training is limited.

 Government Policy towards Small-scale and cottage industries

The government is fully aware of the potential of cottage and small-scale industries for industrial development. The following organizations have been established to develop this sector of economy.
  • Pakistan Small Industries Corporation (PSIC)
  • Punjab Small Industries Corporation (PSIC)
  • Sindh Small Industries Corporation (SSIC)
  • The Small Industries Development Board NWFP (SIDB)
  • The Directorate of Small Industries Baluchistan (DSIB)
The above organizations are taking the following measures:
  • Establishment of industrial estates.
  • Providing marketing facilities.
  • Setting up of technical service centers.
  • Establishing handicraft development centers and carpet centers.
  • Providing pre-investment counseling and guidance to newcomers.
  • Providing local and foreign loans to small industry owners on easy installments.
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The Advantages Of  Establishing Small Scale Industries :Map Form

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