Nearly 7 out of 10 garments exported from Paraguay are destined for Brazil, and the apparel sector of Paraguay has been reactivated due to growth in exports to the Latin American country.Argentina used to be the traditional buyer of Paraguayan apparels. But there have been obstacles faced in the Argentine market because of which entrepreneurs are trying to explore other markets.

Several Brazilian textile companies are coming to Paraguay because of the opportunities being offered by the country, mainly in terms of the Fiscal Incentives Act, the Maquila Law, and the law that provides legal guarantee for domestic and foreign investments. Around 20,000 people in the country are directly dependent on the apparel sector, of which most are women or heads of the household. 

Paraguay's earliest manufacturing industries processed hides and leather from its abundant cattle and tannin from quebracho trees. Small-scale manufacturing, especially textiles, flourished under the Francia dictatorship, when the nation's borders were closed. 

Textiles, clothing, leather, and shoes comprise the third largest manufacturing subsector of the country. These industries are traditional, grounded in the nation's abundance of inputs like cotton fibers, cattle hides, and tannin extract.