Exporters decry high costs, policy neglect

Exporters in the value-added apparel and textile sector have expressed serious concern over record-high production costs and a lack of confidence in government policies. Pakistan Apparel Forum Chairman Javed Bilwani told The Express Tribune that an undeclared "war-like" situation exists between the export industry and the government, weakening the national economy.

He said exporters remain committed to sustaining industrial operations, but government measures are effectively pushing the industry towards closure. "The highest production costs in history have become a threat to industrial growth and Pakistan's economic stability," he added.

Despite facing intense global competition, unfavourable policies and the highest-ever cost of doing business, the local export industry is struggling for survival. Yet government actions suggest a lack of priority for the sector. Exporters are grappling with expensive electricity and gas, rising raw material costs, the highest tax rates in the region (including multiple taxation layers), costly financing, high wages, heavy operational expenses and a poor ease-of-doing-business environment.

Bilwani noted that despite longstanding demands, exporters have not been provided a one-window facility under a central authority and must deal with multiple departments. Instead of offering relief, the government is introducing stricter measures that are pushing the industry towards shutdown.

He emphasised that exports remain the only viable source of earning foreign exchange and reducing the trade deficit, yet the sector continues to be neglected. "It appears as if there is an undeclared war between exporters and the government," he remarked, adding that while exporters demand a reduction in production costs, the government's policies continue to increase them.

Policy inconsistency, including rising utility tariffs, has rendered exports uncompetitive. Bilwani questioned whether exporters might relocate industries to other countries in the region or shift to non?export businesses under current conditions.

He said Pakistan's textile exports, a major source of foreign exchange, are under pressure due to structural issues, policy challenges and global headwinds. The value-added apparel and textile industry relies heavily on electricity, gas and water, all of which are significantly more expensive in Pakistan compared with countries like Bangladesh and Vietnam.

Frequent power outages and gas shortages are disrupting production, increasing costs and eroding competitiveness against regional rivals. As a result, production is declining, jobs are being lost and many factories are moving towards partial or complete shutdown.

High interest rates have restricted access to affordable financing, particularly for small and medium enterprises, while new entrants into the export sector have stalled. Membership in exporters' representative bodies is also declining, indicating business closures or a shift towards non?export sectors.

Bilwani pointed out that although Pakistan produces cotton, the industry still relies on imports of raw cotton and synthetic fibre to meet demand. He said that while Pakistan has a higher spindle capacity than Bangladesh, the latter operates more efficiently, reflecting a gap in productivity.

Global buyers are increasingly demanding strict compliance with environmental and labour standards, adding further costs for exporters. Delays in tax refunds are also affecting cash flows. "Pakistan is the only country in the region that withholds exporters' funds for other uses," he said.

Logistical and infrastructure challenges – such as port congestion, high inland transportation costs and complex customs procedures – are further hindering exports. The domestic transport network is also affected by sudden increases in petroleum prices and periodic unrest, leading to delays and higher costs.

Countries like Bangladesh, Vietnam and India are attracting international buyers due to lower costs, better trade agreements and more stable policies. Bilwani warned that limited trade agreements and heavy reliance on a few major markets, such as the European Union and the United States, pose additional risks to Pakistan's exports and economy.

He cautioned that unless immediate corrective measures are taken in light of these ground realities, Pakistan could face industrial decline, loss of export markets and further economic instability.