Abstract Due to the ‘fast fashion’ modes of production and consumption, clothes are not even used half of their lifetime (Han et al., 2015; Oxfam, 2019), resulting in increased production and consumption of textiles and apparel and generation of subsequent waste, especially in the UK, USA, and EU. In Pakistan, the import of second-hand clothing became particularly significant. Pakistan has a sizeable market of UTC. The UTC imports do not only cater to the domestic market, but prime-quality used clothes are exported to many countries in Africa, the Middle East, and Europe. This GIZ-sponsored study aimed to investigate the approaches to aid policymakers and stakeholders in formulating policies and strategies to align the economic performance of the sector with social aspects and environmental protection to make the textile sector more sustainable and inclusive in Pakistan. 

This study is conducted using a mixed methods approach, which involves the use of qualitative as well as quantitative analysis. The qualitative analysis includes discussions with the key economic actors and stakeholders, including the relevant trade bodies such as PSHCMA, EPZA, Ministry of Commerce, APTMA, academia, and policy experts working on Lean Manufacturing in Textiles, Waste Management Agencies in Lahore and Karachi, and market committees in Lahore and Karachi using key informant interviews. This study investigated used textile clothes (UTC) using data and information from field and desk research carried out across Karachi, Lahore, and Faisalabad. Quantitative analysis is undertaken using primary data from the endpoint with consumers from Lunda Markets (local second hand clothing markets). Almost one-third (around 30%) of the UTC businesses in the studied markets are covered. 

The study concludes that it is easier to start a UTC business because of its labor-intensive nature and lower investment requirement. The benefits of recycling and reuse of used clothes are significant as the economic and environmental costs of producing new clothes are certainly enormous, especially in terms of extraction and use of natural resources. These benefits, however, must be accounted for the environmental costs of some of the practices of using and disposing of used clothes which are detrimental to the environment.