In a formal letter addressed to Dr. Syed Tauqir Hussain Shah, Adviser to the Prime Minister, the Pakistan Textile Council (PTC) has explicitly requested the removal of cross-subsidies embedded in industrial electricity tariffs, warning that without urgent correction of power pricing distortions, Pakistan’s export competitiveness—particularly in textiles—will continue to deteriorate.
The Council emphasized that industrial power tariffs currently carry a substantial cross-subsidy burden, significantly inflating production costs for export-oriented manufacturers and placing Pakistan at a disadvantage against regional competitors. It urged that the cross-subsidy cost of PKR 160 billion (XDISCOs and KE) embedded in the Industrial electricity tariff be removed, noting that such a reform would allow charging the actual electricity price to industry, enhance grid utilization, and reduce incentives for industries to move off-grid.
The letter also raised serious concerns about the blanket application of the Time-of-Use (ToU) tariff regime, with different rates for Peak and off-peak hours, to industries operating on a three-shift basis. According to PTC, exporters providing stable base-load demand are being penalized through peak-hour charges, forcing production cuts or the absorption of unsustainable cost increases. With incremental tariff regimes already in place, the Council argued that the rigid ToU framework has lost its economic rationale and requires an urgent review.
Warning of an escalating crisis, the PTC noted that Pakistan’s textile and apparel exports declined across all major product categories and key markets—including the EU, the United States, and the United Kingdom—during the first half of FY 2025–26. Terming the situation an “export emergency,” the Council cautioned that rising regional competition and impending trade agreements by neighboring countries could further weaken Pakistan’s export base unless the government undertakes decisive, time-bound intervention.
The PTC concluded that Pakistan’s textile sector retains the capacity, workforce, and international market linkages to drive export-led recovery, but stressed that this potential can only be realized through immediate policy reforms that ensure a predictable, rational, and cost-competitive energy regime.
