The Pakistan Textile Council (PTC) has urged Prime Minister Muhammad Shehbaz Sharif to take immediate policy measures to address structural issues that are preventing Pakistan’s textile and apparel sector from returning to a growth trajectory.
In a letter addressed to the Prime Minister, PTC highlighted that Pakistan’s textile and apparel exports remained virtually stagnant during FY 2025-26, increasing by only *0.26%* to *USD 17.93 billion* from *USD 17.88 billion* in the previous fiscal year. The Council also expressed concern over the sharp decline in June 2026 exports, which fell *16.71% year-on-year* and *23% compared to the previous month*, underscoring growing competitiveness challenges facing the country’s largest export industry.
PTC identified three critical structural constraints responsible for the sector’s continued stagnation:
*High Cost of Doing Business*
The Council noted that rising labour costs, increasing mandatory employer contributions, and distortions in industrial electricity tariffs have significantly increased production costs for exporters. It pointed out that while higher-voltage industrial consumers account for the majority of industrial electricity consumption, they continue to bear tariff charges that are substantially above their actual cost of service, reducing Pakistan’s export competitiveness.
*Delay in Operationalising the Export Refinance Scheme*
PTC welcomed the government’s announcement in the Federal Budget 2026-27 to expand the Export Refinance Scheme but expressed concern that the initiative has yet to be implemented. The continued delay forces exporters to finance working capital at commercial market rates, while competing exporting countries continue to provide concessional export financing to their industries.
*Deepening Domestic Cotton Shortage*
The Council also warned that Pakistan’s cotton production has declined to approximately *5.5 million bales, compared to a peak of **14.8 million bales* in 2011-12, creating a structural gap between domestic supply and industrial demand. It stressed that climatic challenges, water shortages, and declining farmer confidence have significantly weakened the country’s cotton base, threatening the long-term sustainability of the textile value chain.
To restore competitiveness and accelerate export growth, PTC recommended a series of immediate policy interventions, including:
* Reducing employer EOBI contributions to *2%* without affecting employee benefits.
* Directing NEPRA to correct industrial electricity tariff anomalies on a revenue-neutral basis by aligning tariffs with actual cost of service.
* Immediately operationalising the announced expansion of the Export Refinance Scheme to ensure exporters receive timely access to concessional working capital.
* Treating the cotton crisis as a national priority through a comprehensive strategy that includes a credible support price mechanism, accelerated introduction of heat-tolerant seed varieties, protection of cotton-growing areas, and realistic production forecasting.
Commenting on the situation, *Mr. Fawad Anwar, Chairman of the Pakistan Textile Council*, stated:
> “Pakistan’s textile and apparel sector has consistently demonstrated resilience despite successive economic, energy and climatic challenges. The industry is not seeking protection. It seeks a level playing field through competitive energy pricing, timely implementation of announced financing measures, and a sustainable supply of its primary raw material. Addressing these structural issues is essential to restore export growth, strengthen industrial competitiveness, and maximise Pakistan’s export potential.”
The Pakistan Textile Council expressed confidence that timely implementation of these measures would help restore momentum to Pakistan’s largest export sector, strengthen foreign exchange earnings, and support sustainable economic growth.
