Key Takeaways
- Pakistan’s textile industry has urged the government to introduce immediate policy measures.
- The sector faces challenges such as rising production costs and a worsening cotton shortage.
- Exports have shown a slowdown, with June seeing a 23 percent month-on-month decline.
The Pakistan Textile Council (PTC) has called on Prime Minister Shehbaz Sharif to implement urgent policy measures to address the industry's current challenges. In a letter addressed to the prime minister, the PTC highlighted that textile and apparel exports have seen minimal growth of just 0.26 percent in fiscal year 2025-26, reaching $17.93 billion from $17.88 billion the previous year.
The industry has experienced a significant slowdown, with June witnessing a 17 percent decline in exports compared to the same period last year and marking their lowest monthly level in 14 months. This downturn is particularly concerning as Pakistan’s overall exports fell by 6 percent during the fiscal year, while imports reached a four-year high.
The PTC identified three major challenges: high production costs, delays in implementing the expanded Export Refinance Scheme announced in the FY2026-27 federal budget, and a deepening domestic cotton shortage. According to the council, Pakistan’s cotton production has fallen significantly to around 5.5 million bales from a peak of 14.8 million bales in 2011-12.
The decline in cotton production is attributed to climate-related challenges, water shortages, and reduced farmer confidence. To improve competitiveness, the PTC recommended reducing employer EOBI contributions to 2 percent, revising industrial electricity tariffs to better reflect actual costs, immediately operationalising the expanded Export Refinance Scheme, and treating the cotton sector as a national priority through support prices, improved seed varieties, protection of cotton-growing areas, and more realistic production forecasting.
Fawad Anwar, PTC Chairman, stated that the industry is seeking a competitive business environment rather than protection. He emphasized the need for immediate action to address these issues and ensure the sector’s sustainability in the face of increasing external pressures.
The industry is seeking a competitive business environment rather than protection.
Fawad Anwar, PTC Chairman
