Textile Exporters Warn of Significant Decline Amid Rising Costs and Demand Drop

ISLAMABAD: Textile exporters in Pakistan are sounding the alarm over a potential steep decline in exports during the upcoming second quarter (October-December) of the fiscal year, attributing this downturn to weakening demand in Western markets, soaring freight charges, and escalating production costs.

In a statement released on Sunday, Khuram Mukhtar, Patron-in-Chief of the Pakistan Textile Exporters Association (PTEA), highlighted the mounting pressures facing the country’s export sector. He noted that inflation in Western markets has diminished demand from international buyers, while sea freight costs have surged by 1.5 to 2.5 times, further squeezing the already thin profit margins of exporters.

The rising costs of inputs and logistics are undermining the competitiveness of Pakistani textile products, Mukhtar warned, emphasizing that these challenges could significantly impact the nation’s economy and its standing in global markets. The PTEA is advocating for a 6-8% Duty Drawback of Local Taxes and Levies to support exporters and is urging the government to expedite the clearance of outstanding refunds.

Looking ahead, the textile industry is calling for the immediate implementation of the announced 4.5% Export Finance Scheme rate, which has yet to be put into action. As the sector grapples with these challenges, stakeholders are keenly awaiting government responses and potential policy adjustments to mitigate the impending crisis.