Pakistan textile exports are headed for a steep decline in the October-December quarter, exporters have warned, blaming weak demand in Western markets, higher sea freight charges and rising production costs.
Why Textile Exports Are Under Pressure
In a statement issued on Sunday, Khurram Mukhtar, Patron-in-Chief of the Pakistan Textile Exporters Association, said weak demand in Western markets, linked to inflation there, had hit orders. Sea freight charges have risen by 1.5 to 2.5 times, squeezing thin margins.
He called the fall in export volume unprecedented and warned that only financially strong firms would survive, with lost market share hard to regain. Weak domestic demand amid high inflation has added to the strain across ginning, spinning, weaving, processing and knitting.
What Exporters Are Asking For
The association has asked the government for temporary support through the Duty Drawback of Local Taxes and Levies scheme at 6 to 8 percent, faster clearance of pending refunds and removal of cross-subsidies in industrial energy tariffs.
On export finance, it said the government had announced a fixed 4.5 percent rate in the FY27 Finance Bill, but banks were charging at least 5.5 percent and up to 8.5 percent. It also alleged that about Rs200 billion of financing had gone to yarn exporters even though yarn is on the scheme’s negative list.
Modernisation Package Proposed
Mukhtar proposed a Rs140 billion modernisation package, with Rs20 billion each for ginning and sizing and Rs50 billion each for weaving and processing. He also called for a 10-year strategic plan for the sector, saying the industry has historically been reactive and needs a proactive approach.
