According to a report issued by State Bank of Pakistan (SBP), the country's exports of leather goods, including garments and gloves, fell 36.8% in the third quarter of fiscal 2007
(July to March) to $351.8 from $556.5 million in same period of the prior year.

According to the report, a slump in leather garment exports—which account for almost 73% of Pakistan’s total leather exports—was the dominant factor behind the general decline.

The fall in leather garment exports this financial year coincides with a reduction in the rebate on such goods from 5.17% to 3.22% which came into effect in August 2006. Industry sources also claim that statistics concerning the export of leather garments in FY06 may not have been completely accurate as one off higher exports to Iran last year, before the rebate was reduced, may have caused export growth to have been overstated.

However, total exports of finished leather, leather goods and footwear) totalled $635 million in the first nine months of fiscal 2007.