Pakistan’s textile exporters are heading for a sharp contraction in overseas shipments in the October to December or the second-quarter of fiscal 2027.
According to Khurram Mukhtar, Patron-in-Chief of the Pakistan Textile Exporters Association (PTEA), the industry is being squeezed from every side and has urged policymakers to intervene before lasting damage is done.
Mukhtar blamed the downturn on several overlapping pressures. Persistent inflation across Western economies has weakened buying appetite among overseas customers, while ocean freight rates have climbed by between 1.5 and 2.5 times, wiping out margins that were already thin.
Meanwhile, escalating input and logistics costs are eroding the price competitiveness of Pakistani goods abroad.
He described the fall in export volumes as without precedent, warning that only the strongest businesses will remain standing and that lost market share is extremely hard to win back.
Exporters, he explained, are the engine of the entire textile chain, so any drop in shipments is felt at every stage of production.
With household spending at home also weakened by inflation, the sector faces a double blow, leaving ginning, weaving, spinning, processing and knitting units fighting for their survival.
He called on the government to act without delay. His proposals include temporary support through the DLTL scheme at 6-8% to help exporters hold their positions in overseas markets, rapid release of the sizeable refunds stuck under various heads to ease cash shortages throughout the supply chain, and urgent elimination of the cross-subsidies built into energy tariffs.
Mukhtar also drew attention to what he called serious irregularities in the Export Finance Scheme (EFS).
Although the FY27 Finance Bill promised a fixed rate of 4.5%, he said this has yet to be put into practice, with lenders levying at least 5.5% and a few still charging up to 8.5%.
He noted that roughly PKR200 billion of EFS funding has gone to yarn exporters despite yarn exports appearing on the negative list.
Sugar exporters, whose industry is tightly regulated, have also secured financing, he said, while qualifying textile exporters achieving five to six times the 2x performance threshold set by the State Bank of Pakistan (SBP) are being denied allocations.
Such misdirection, he argued, discourages value addition and penalises the businesses that bring in the most foreign currency.
Image courtesy: Freepik
