The Pakistan Textile Council (PTC) has written to Prime Minister Muhammad Shehbaz Sharif, urging the Government to preserve the Export Facilitation Scheme (EFS) for all legitimate export inputs and reject demands to exclude all yarns and fabrics under Chapters 52 and 55 of the Pakistan Customs Tariff. PTC Chairman Fawad Anwar signed copies of the letter and sent them to the Chairman, Federal Board of Revenue, and the Secretary, Ministry of Commerce. In the letter, PTC appreciated the Government’s actions to curb misdeclaration and misuse of EFS and expressed full support for them.
It noted, however, that associations representing businesses focused on the domestic market are now seeking further exclusions after the Government removed raw cotton, cotton yarn, and grey cloth from the scheme in 2025 through SRO.1359(I)/2025.
PTC pointed out that these demands contradict the understanding reached during earlier consultations that no further exclusions would be sought. Accepting these demands would cause serious and lasting harm to Pakistan’s value-added exports,” Chairman Fawad Anwar stated in the letter.
PTC highlighted that global demand for textiles and apparel has firmly shifted toward artificial fibres (MMF).
According to Textile Exchange’s Materials Market Report 2025, synthetic fibres accounted for 69 percent of global fibre production in 2024, while cotton’s share fell to 19 percent. MMF-based products account for about 63 percent of global textile and apparel trade, but only about 12 percent of Pakistan’s textile and apparel exports.
Competing countries are expanding rapidly in this segment, with Bangladesh targeting an increase in the MMF share of its apparel exports from about 24 percent to 40 percent by 2030.
The letter noted that Pakistan has almost no viscose or lyocell fibre production, while the domestic polyester value chain faces cost and scale disadvantages compared with Chinese and ASEAN producers. Value-added exporters therefore rely on imported MMF yarns and fabrics, often specified by international buyers, to secure and deliver orders.
PTC warned that the 2025 exclusions already require exporters to pay taxes upfront on those inputs, adding to liquidity pressure and production costs. Excluding all yarns and fabrics under Chapters 52 and 55 would raise input costs and lock up working capital for apparel and made-ups exporters, restrict access to the fibres that drive global apparel demand, discourage investment in new value-added and MMF-based capacity, and weaken buyer confidence in Pakistan as a stable sourcing destination.
On misuse, PTC reiterated its full support for firm action against misdeclaration, under-invoicing and diversion of EFS imports into the domestic market.
The letter said FBR and Pakistan Customs have the legal powers, systems, and personnel to detect and prosecute such cases, and that recent detections show enforcement is effective.
“The misuse of a few cannot justify penalising genuine exporters or dismantling a scheme that is central to export competitiveness,” the Chairman added.
PTC requested the Prime Minister’s intervention on the following:
- EFS should remain available for all legitimate export inputs, with no further exclusions of yarns or fabrics under Chapters 52 and 55.
- FBR should strengthen enforcement through input-output coefficient audits, reconciliation of EFS imports against export documents, risk-based examination and strict penalties for offenders.
- The Council should address domestic suppliers’ concerns by restoring zero-rating on local supplies of inputs to EFS users, rather than taxing imported inputs.
PTC stated that textiles and apparel remain Pakistan’s largest export sector and that its growth depends on competitive access to the inputs the world market demands. The Council reaffirmed its commitment to working with the Government to curb misuse while protecting the exporters who earn foreign exchange for the country.