Pakistani second-hand clothing imports have reached their highest level in history with 1.137 million tonnes valued at \$511 million brought into the country in the last fiscal year. The figure surpasses FY24’s record of 990,266 tonnes worth \$434 million reflecting surging demand for affordable apparel as poverty deepens.

Poverty Driving Demand for Landa Bazaar Goods

According to the World Bank, nearly 45% of Pakistan’s population now lives below the poverty line with the benchmark raised from \$3.65 to \$4.20 per person per day. This adjustment increased the poverty ratio for lower-middle-income groups to 44.7%, up from 39.8% under the previous measure.

Landa bazaars and flea markets, long a fixture of Pakistan’s urban and rural retail landscape have become a lifeline for millions unable to afford new clothing.

Traders Call for Tax Cuts

Muhammad Usman Farooqui, General Secretary of the Pakistan Second-Hand Clothing Merchants Association (PSHCMA) says rising poverty is the main driver behind the surge.

“Families from lower and middle-income brackets are increasingly dependent on affordable used goods,” Farooqui said, urging the government to reduce import taxes and duties.

Currently, second-hand clothing imports are subject to:

10% regulatory duty
5% customs duty
6% advance income tax
~5% sales tax

Traders also face a 5% sales tax on the difference between purchase and sale prices, while those earning above Rs. 600,000 annually are liable for income tax.

Finance Bill 2024 Adds Compliance Burden

The Finance Bill 2024 has designated second-hand clothing importers as withholding agents requiring them to collect advance tax at 0.1% from distributors, dealers and wholesalers. For non-compliant retailers, this tax rises to 2%–2.5%.

Farooqui noted that many small-scale traders in the used clothing business are unregistered with the Federal Board of Revenue (FBR) and lack fixed business premises making compliance with these requirements difficult.

Import Sources and Duties

Pakistani second-hand clothing imports primarily come from Europe, the USA, Japan, Korea, China and Canada. Around 60–70% is processed in special economic zones for re-export with only 10–20% sold locally.

Import duties currently stand at:

Rs. 36 per kg for clothing
Rs. 66 per kg for shoes

Price Gap Between New and Used Goods

Market surveys show the stark price difference:

Item	New Price	Used Price
Jeans	N/A	Rs. 300–400
Shirt	N/A	Rs. 250–300
Sports shoes (local)	Rs. 2,500–3,500	Rs. 600–800
Branded shoes (imported)	Rs. 4,000–5,500	Rs. 600–800

The lower costs make used goods the only viable option for many households.

Policy Debate Continues

Traders argue that reducing import duties could make second-hand clothing more accessible easing pressure on low-income families during a period of high inflation and declining real wages.