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Cottage Industry in Pakistan

Daily FT

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March 23, 2026

In Pakistan cottage or household industries hold an important position in rural setup.

- SHAHID RAZA

Cottage Industry in Pakistan

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 handwoven carpets, embroidered work, brassware, rugs and traditional bangles. These are also considered important export items and are in good demand in international markets.It is important to encourage cottage and small-scale industries. There are meager resources to develop large-scale industries. However, a program for developing and promoting small-scale industries both in rural and urban areas is more feasible. The advantages of establishing such industries in Pakistan are:

Cottage and small-scale industries are labor intensive and provide employment to 80% of the industrial labor force. This reduces the unemployment and offers opportunities for self-employment.

Cottage or small-scale industries like carpet weaving, candle-making and handicrafts can be established in houses and women can be gainfully employed. This increases the active labor force.

These industries also meet the local demands for industrial goods, and save foreign exchange.

There is a demand for rugs, carpets, brassware, handicrafts and embroidered work in the International market. These goods provide 30% of the export receipts of the manufacturing sector. When people are employed gainfully in villages, the migration of people from rural to urban areas will reduce. The problems of housing, sanitation, education, transport and health will also be reduced in urban areas.

Many districts are underdeveloped. With the expansion of such industries, the regional disparity in income can be reduced.

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