Pakistan's textile industry, a backbone of the nation's economy, is facing a perfect storm of challenges that threaten its very survival. The All Pakistan Textile Mills Association (APTMA) recently sounded the alarm, warning that skyrocketing input and energy costs, coupled with a burdensome regulatory environment and shifting global market dynamics, are squeezing exporters to the brink. But here's where it gets controversial: while the government acknowledges the sector's importance, the industry feels its pleas for relief are falling on deaf ears. And this is the part most people miss: without immediate and decisive action, Pakistan risks losing its competitive edge in the global textile market, jeopardizing jobs and economic growth.
In a recent meeting with Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb and Federal Minister for Petroleum Ali Pervaiz Malik, the APTMA delegation painted a grim picture of the industry's struggles. They highlighted how exporters are battling rising costs, from raw materials to energy, in an increasingly cutthroat global marketplace. The delegation stressed that without a stable, supportive policy framework, the sector's ability to compete, grow exports, and create jobs is in grave danger.
Here’s the crux of the issue: APTMA isn’t just asking for handouts; they’re demanding structural reforms that level the playing field. For instance, they’re calling for regionally competitive power tariffs of 8–9 cents/kWh, a stark contrast to the current 13 cents/kWh. They also want the removal of Rs. 102 billion in cross-subsidies on industrial power, which they argue unfairly burdens the sector. But is this a fair ask, or are they overstepping? We’ll let you decide.
The delegation also urged the replacement of the outdated Time-of-Use (ToU) regime with a single 24-hour tariff for B3/B4 consumers, arguing it would boost capacity utilization and stabilize operations. They further highlighted power shortages in LIEDA, seeking exemption from the captive power levy until grid supply meets demand. Additionally, they flagged a miscalculation in OGRA’s RLNG price actualization (2015–22), estimating an industry overcharge of USD 260–442 million, and demanded transparent recalculation and suspension of recoveries.
Now, here’s a thought-provoking question: Are these demands reasonable, or are they too ambitious in the current economic climate? APTMA also called for recalculation of the captive power levy using lawful methodology, removal of legacy costs from wheeling charges, and reforms to Pakistan’s 18% sales tax structure, proposing a graduated tax regime to ease liquidity pressures. They demanded the restoration of the 1% fixed tax regime for exporters, reduction of minimum turnover tax to 0.5%, single-digit interest rates, and immediate safeguards for domestic spinning and weaving sectors against rising imports, particularly from China.
During the meeting, the Ministers acknowledged the textile industry's pivotal role in Pakistan's economy, contributing significantly to exports, employment, and industrial activity. They reiterated the government's commitment to supporting the sector's sustainability within the broader economic reform framework. However, the Finance Minister’s assurance that the government is actively reviewing issues affecting the cost of doing business for export-oriented industries left many wondering: will these reviews translate into tangible action?
Here’s the million-dollar question: Can Pakistan afford to ignore these demands, or will it risk losing its textile industry to more competitive markets? The Ministers emphasized efforts to address genuine concerns of compliant sectors while advancing structural reforms through consultation and institutional processes. They highlighted the importance of equity, transparency, and broad-based participation across the economy. But as the saying goes, the proof is in the pudding. Will these promises materialize into policies that save the textile industry?
As the debate rages on, one thing is clear: the textile sector’s plight is a symptom of deeper economic challenges facing Pakistan. What do you think? Are APTMA’s demands justified, or are they asking for too much? Let us know in the comments below!
