Pakistani textile makers face a steep decline in goods exports during the second quarter from October to December, driven by weakening Western demand, surging shipping costs, and escalating production expenses.

According to Pakistan Textile Exporters Association (PTEA) Patron-in-Chief Khurram Mukhtar, ocean freight charges have climbed by 1.5 to 2.5 times, severely squeezing profit margins.

The downturn is affecting the country’s entire textile value chain, from ginning and spinning to weaving, knitting, and processing, compounded by weak domestic demand amid high inflation.

PTEA Patron-in-Chief Khurram Mukhtar said inflation in major Western consumer markets has depressed wholesale orders from international retail brands. Rising input costs and higher transport expenses have also hurt competitiveness. Pakistani apparel and textile goods now struggle against goods from regional manufacturing hubs across South and Southeast Asia.

To stop factory shutdowns and protect export volumes, the association wants an immediate temporary Duty Drawback of Local Taxes and Levies rebate of 6 per cent to 8 per cent. Exporters are also demanding the quick release of delayed tax refunds across government heads to resolve working capital shortages.

Mill operators also want authorities to eliminate cross-subsidies embedded in industrial electricity and gas tariffs. They say these surcharges push local production costs above regional rivals.

Credit access remains another friction point for garment suppliers. The federal government set a fixed 4.5 per cent financing rate under the Export Finance Scheme in the FY27 Finance Bill. Commercial lenders have not implemented the concessionary rate.

5 per cent. Mukhtar said approximately Rs200 billion in concessionary financing went to yarn exporters, even though yarn is on the scheme’s negative list.

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