Published: 09:06 AM, 10 November 2025
Pakistan’s textile exports are no longer flailing; they are collapsing in plain sight
Once hailed as the backbone of Pakistan’s economy, the textile sector—the country’s single largest export industry—now stands at the brink of implosion.
The numbers tell a story that can no longer be dressed up with policy promises or patriotic rhetoric: Pakistan’s textile exports are not merely declining—they are collapsing in plain sight. What was once a slow bleed has become a visible haemorrhage, exposing the rot within decades of poor governance, ill-conceived subsidies, and structural inefficiencies that no longer respond to quick fixes.
The recent announcement by Gul Ahmed Textile Mills, one of Pakistan’s most prominent textile exporters, serves as a grim milestone in this downward spiral.
In a notice to the Pakistan Stock Exchange, the company declared the discontinuation of its apparel export segment, citing “persistent operational losses amid rising costs, policy changes and regional competition.” The statement laid bare the fatal combination of domestic mismanagement and external pressure that has crushed the country’s export competitiveness.
“Persistent challenges include intense regional competition, a stronger exchange rate, recent government policy changes, such as the increase in advance turnover tax, rising costs of nominated fabrics and elevated energy tariffs,” the company said in its filing. “Collectively, these factors have significantly undermined the segment’s cost structure and profitability, resulting in continued operational losses.”
What is most striking about this admission is that it places the blame squarely on internal dysfunction rather than global market volatility. For years, Pakistan’s textile giants have operated in an environment of artificial comfort—propped up by subsidies and concessional energy packages that shielded them from the need to innovate or adapt. Now, with those supports eroding, the industry’s structural weaknesses stand fully exposed.
According to data from the Pakistan Textile Council (PTC), the country’s textile exports fell 3.83% year-on-year in the first quarter of FY26 to $7.61 billion, down from $7.91 billion in the same period last year. The decline deepened in September, with exports plunging 11.71% to $2.51 billion, marking the fifth contraction in six months. For an economy where textiles account for nearly 60% of total exports, these figures represent not just an industry slump, but an economic crisis.
At the same time, imports rose 13.49% to $16.97 billion, further widening the trade deficit. The result is a textbook case of economic imbalance—falling export revenues, rising import costs, and a mounting trade gap that threatens macroeconomic stability.
The Pakistan Bureau of Statistics data offers no comfort; the picture it paints is one of a system eating away at itself. Industry leaders have long warned that high energy costs, inadequate infrastructure, and crippling water shortages are pushing Pakistan’s textile units out of the global market.
They point out, with justifiable frustration, that electricity tariffs in Pakistan now exceed those in the United States and Europe, leaving the industry unable to compete with regional rivals like Bangladesh, India, and Vietnam, where production costs remain significantly lower.
PTC Chairman Fawad Anwar has sounded the alarm in stark terms: “If urgent corrective measures are not taken, Pakistan risks further closures of export-oriented units and reduced foreign investment. This will not only mean job losses and industrial shutdowns, but also a sharp decline in Pakistan’s foreign exchange earnings at a time when the country cannot afford such shocks.” But the warnings are nothing new—and therein lies the tragedy.
Pakistan’s policymakers have treated the textile sector as a political talking point rather than a competitive enterprise. Instead of reforming it for efficiency, successive governments have pursued short-term fixes—rebates, bailouts, and energy subsidies—that temporarily inflated export figures but did nothing to build sustainable competitiveness.
Meanwhile, the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), in its latest policy brief, draws attention to another gaping wound: Pakistan’s logistics nightmare.
The report describes an inefficient and costly logistics system that swallows 15.6% of GDP—almost double the cost in advanced economies. This means that before a single container of garments leaves the port, it is already burdened with costs that make Pakistani exports unviable. Pakistan’s logistical collapse has been so severe that the country has fallen completely off the World Bank’s Logistics Performance Index, while its regional peers climb steadily upward.
In India, Vietnam, and Bangladesh, efficient ports, modern rail systems, and integrated supply chains have given exporters the edge to meet deadlines, cut costs, and expand market share.
In Pakistan, by contrast, Karachi Port and Port Qasim, the supposed gateways of trade, are running at a third of their designed capacity. Containers remain stranded for twice as long as in neighbouring countries, choking productivity and eroding whatever competitiveness remains.
This dysfunction is not limited to infrastructure—it is emblematic of Pakistan’s broader industrial malaise. The textile industry’s collapse reflects a deeper problem: an economy that has been allowed to drift without a coherent strategy. While regional competitors aggressively pursued trade diversification and modernisation, Pakistan remained trapped in a cycle of dependence, producing the same low-value cotton products and relying on outdated technology.
The energy crisis has compounded the decline. With some of the highest electricity tariffs in the world, textile mills are forced to run below capacity—or not at all. The promise of cheap gas and electricity for export sectors has repeatedly been broken, with government after government unable to sustain a consistent supply. For industries that depend on continuous operations, these interruptions are fatal.
Moreover, policy inconsistency has become a hallmark of Pakistan’s economic management. Changes in tax regimes, export facilitation programs, and import restrictions occur so frequently that investors can no longer plan for the long term. The increase in advance turnover tax—one of the key grievances cited by Gul Ahmed—illustrates how arbitrary fiscal adjustments can cripple an already fragile sector.
Even the supposed benefits of a “stronger rupee,” touted by policymakers as a sign of economic recovery, have turned into a curse for exporters. A stronger exchange rate makes exports more expensive in global markets, squeezing profit margins even further. For a country where export competitiveness was already thin, this policy has been a self-inflicted wound.
Pakistan’s textile collapse is not a sudden catastrophe—it is the cumulative outcome of years of neglect, mismanagement, and misplaced priorities. The illusion of resilience that once surrounded the sector has been shattered. From spinning to stitching, every stage of production is under strain.
Industrial zones in Faisalabad and Karachi—once buzzing with activity—are now dotted with shuttered factories and half-empty warehouses. And yet, in the face of this implosion, the national discourse remains disturbingly detached. Policymakers speak of “revival plans” and “energy relief packages” as if the situation were merely cyclical.
But the data, the shutdowns, and the layoffs all point to something far more profound: Pakistan’s textile exports are no longer flailing—they are collapsing, piece by piece, in plain sight. The collapse of this sector is more than an economic story—it is a reckoning with decades of denial.
What Pakistan faces today is not a temporary setback but the unravelling of its most vital industry. The warning signs were always there; they were simply ignored until the fabric of the nation’s export economy began to tear beyond repair.
>> Source: Maldives Insight
The numbers tell a story that can no longer be dressed up with policy promises or patriotic rhetoric: Pakistan’s textile exports are not merely declining—they are collapsing in plain sight. What was once a slow bleed has become a visible haemorrhage, exposing the rot within decades of poor governance, ill-conceived subsidies, and structural inefficiencies that no longer respond to quick fixes.
The recent announcement by Gul Ahmed Textile Mills, one of Pakistan’s most prominent textile exporters, serves as a grim milestone in this downward spiral.
In a notice to the Pakistan Stock Exchange, the company declared the discontinuation of its apparel export segment, citing “persistent operational losses amid rising costs, policy changes and regional competition.” The statement laid bare the fatal combination of domestic mismanagement and external pressure that has crushed the country’s export competitiveness.
“Persistent challenges include intense regional competition, a stronger exchange rate, recent government policy changes, such as the increase in advance turnover tax, rising costs of nominated fabrics and elevated energy tariffs,” the company said in its filing. “Collectively, these factors have significantly undermined the segment’s cost structure and profitability, resulting in continued operational losses.”
What is most striking about this admission is that it places the blame squarely on internal dysfunction rather than global market volatility. For years, Pakistan’s textile giants have operated in an environment of artificial comfort—propped up by subsidies and concessional energy packages that shielded them from the need to innovate or adapt. Now, with those supports eroding, the industry’s structural weaknesses stand fully exposed.
According to data from the Pakistan Textile Council (PTC), the country’s textile exports fell 3.83% year-on-year in the first quarter of FY26 to $7.61 billion, down from $7.91 billion in the same period last year. The decline deepened in September, with exports plunging 11.71% to $2.51 billion, marking the fifth contraction in six months. For an economy where textiles account for nearly 60% of total exports, these figures represent not just an industry slump, but an economic crisis.
At the same time, imports rose 13.49% to $16.97 billion, further widening the trade deficit. The result is a textbook case of economic imbalance—falling export revenues, rising import costs, and a mounting trade gap that threatens macroeconomic stability.
The Pakistan Bureau of Statistics data offers no comfort; the picture it paints is one of a system eating away at itself. Industry leaders have long warned that high energy costs, inadequate infrastructure, and crippling water shortages are pushing Pakistan’s textile units out of the global market.
They point out, with justifiable frustration, that electricity tariffs in Pakistan now exceed those in the United States and Europe, leaving the industry unable to compete with regional rivals like Bangladesh, India, and Vietnam, where production costs remain significantly lower.
PTC Chairman Fawad Anwar has sounded the alarm in stark terms: “If urgent corrective measures are not taken, Pakistan risks further closures of export-oriented units and reduced foreign investment. This will not only mean job losses and industrial shutdowns, but also a sharp decline in Pakistan’s foreign exchange earnings at a time when the country cannot afford such shocks.” But the warnings are nothing new—and therein lies the tragedy.
Pakistan’s policymakers have treated the textile sector as a political talking point rather than a competitive enterprise. Instead of reforming it for efficiency, successive governments have pursued short-term fixes—rebates, bailouts, and energy subsidies—that temporarily inflated export figures but did nothing to build sustainable competitiveness.
Meanwhile, the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), in its latest policy brief, draws attention to another gaping wound: Pakistan’s logistics nightmare.
The report describes an inefficient and costly logistics system that swallows 15.6% of GDP—almost double the cost in advanced economies. This means that before a single container of garments leaves the port, it is already burdened with costs that make Pakistani exports unviable. Pakistan’s logistical collapse has been so severe that the country has fallen completely off the World Bank’s Logistics Performance Index, while its regional peers climb steadily upward.
In India, Vietnam, and Bangladesh, efficient ports, modern rail systems, and integrated supply chains have given exporters the edge to meet deadlines, cut costs, and expand market share.
In Pakistan, by contrast, Karachi Port and Port Qasim, the supposed gateways of trade, are running at a third of their designed capacity. Containers remain stranded for twice as long as in neighbouring countries, choking productivity and eroding whatever competitiveness remains.
This dysfunction is not limited to infrastructure—it is emblematic of Pakistan’s broader industrial malaise. The textile industry’s collapse reflects a deeper problem: an economy that has been allowed to drift without a coherent strategy. While regional competitors aggressively pursued trade diversification and modernisation, Pakistan remained trapped in a cycle of dependence, producing the same low-value cotton products and relying on outdated technology.
The energy crisis has compounded the decline. With some of the highest electricity tariffs in the world, textile mills are forced to run below capacity—or not at all. The promise of cheap gas and electricity for export sectors has repeatedly been broken, with government after government unable to sustain a consistent supply. For industries that depend on continuous operations, these interruptions are fatal.
Moreover, policy inconsistency has become a hallmark of Pakistan’s economic management. Changes in tax regimes, export facilitation programs, and import restrictions occur so frequently that investors can no longer plan for the long term. The increase in advance turnover tax—one of the key grievances cited by Gul Ahmed—illustrates how arbitrary fiscal adjustments can cripple an already fragile sector.
Even the supposed benefits of a “stronger rupee,” touted by policymakers as a sign of economic recovery, have turned into a curse for exporters. A stronger exchange rate makes exports more expensive in global markets, squeezing profit margins even further. For a country where export competitiveness was already thin, this policy has been a self-inflicted wound.
Pakistan’s textile collapse is not a sudden catastrophe—it is the cumulative outcome of years of neglect, mismanagement, and misplaced priorities. The illusion of resilience that once surrounded the sector has been shattered. From spinning to stitching, every stage of production is under strain.
Industrial zones in Faisalabad and Karachi—once buzzing with activity—are now dotted with shuttered factories and half-empty warehouses. And yet, in the face of this implosion, the national discourse remains disturbingly detached. Policymakers speak of “revival plans” and “energy relief packages” as if the situation were merely cyclical.
But the data, the shutdowns, and the layoffs all point to something far more profound: Pakistan’s textile exports are no longer flailing—they are collapsing, piece by piece, in plain sight. The collapse of this sector is more than an economic story—it is a reckoning with decades of denial.
What Pakistan faces today is not a temporary setback but the unravelling of its most vital industry. The warning signs were always there; they were simply ignored until the fabric of the nation’s export economy began to tear beyond repair.
>> Source: Maldives Insight
