Ministers vow support as US tariffs jeopardize export growth.

Pakistan’s Textile Sector Faces Crisis as US Tariffs Loom; Ministers Pledge Support

Key Concerns Raised by Exporters

1. Threat of US Tariffs

   • Potential new tariffs could cripple Pakistan’s textile exports, already struggling to compete with Bangladesh, India, and Vietnam.

   • Current exports: ~$33 billion (far below regional rivals).

2. Export Finance Scheme (EFS) Amendments

   • Reduced utilization periods and new bank guarantee requirements hurt SMEs relying on temporary imports for re-export.

   • Ijaz A. Khokhar (PRGMEA): “Policy shifts are killing competitiveness.”

3. Tax Regime Shake-Up

   • Abrupt shift from Final Tax Regime (FTR) to Normal Tax Regime (NTR) has increased compliance burdens and cash flow uncertainty.

   • Sohail A. Sheikh (PRGMEA): “No consultation—just chaos.”

4. Stuck Refunds & Bureaucratic Hurdles

   • Delayed tax refunds and rising costs squeezing exporters.

   • Ansar Aziz (PRGMEA): “SMEs need low-cost financing to survive.”

Government’s Response

1. Planning Minister Ahsan Iqbal

• “Export-led growth is non-negotiable.”

• Calls for stable policies and lower business costs.

• Sialkot’s SMEs highlighted as key to boosting exports.

2. Defence Minister Khawaja Asif

• “We won’t let SMEs collapse under bureaucratic pressure.”

• Promises to expedite refunds and address tax concerns at highest levels.

Why This Matters

✅ Textiles = 60% of Pakistan’s exports (~$20 billion/year).
✅ SMEs employ millions—policy instability risks mass job losses.
✅ US market critical—new tariffs could wipe out competitiveness.

What’s Next?

Will government act fast enough? (Past promises often delayed).
Can Pakistan compete with Bangladesh/Vietnam? (Need cheaper energy, faster refunds).
Will US tariffs hit? (If yes, emergency measures needed).

Bottom Line:
Pakistan’s textile sector is at a breaking point. Without urgent policy fixes, exports—and jobs—could collapse.