The Pakistan Textile Council (PTC) has urged Prime Minister Shehbaz Sharif to declare an “Export Emergency”, warning that a sharp loss of competitiveness is threatening exports, jobs and macroeconomic stability, according to a report.
Pakistan’s exports contracted by more than 14% year-on-year in November 2025, marking the fourth straight month of decline. During the first five months of FY26, exports fell to $12.8 billion from $13.7 billion a year earlier, while imports climbed beyond $28 billion. This pushed the trade deficit to nearly $15.5 billion in just five months, with November alone recording a gap of $2.86 billion—33% higher than the same month last year.
The report attributes the downturn largely to a rising cost structure that has rendered Pakistan’s textile sector globally uncompetitive. High energy tariffs, inconsistent taxation, delayed refunds and unpredictable policy signals have squeezed margins, while rival exporters such as Bangladesh, Vietnam, India and Sri Lanka benefit from lower energy costs, stable tax regimes and targeted export incentives.
Textiles account for over 60% of Pakistan’s total exports and employ millions directly and indirectly. The report cautions that every percentage point fall in textile exports has economy-wide repercussions, including reduced foreign exchange earnings, pressure on the rupee, higher inflation and widening fiscal stress. As a result, the export slowdown is no longer a sectoral concern but a national economic risk.
The PTC has also flagged the erosion of policy credibility, noting that exporters operate on long investment cycles involving machinery, skills and market access. Frequent changes in duties, tariffs and incentives undermine confidence and drive international buyers toward more reliable suppliers, markets that are difficult to regain once lost.
While acknowledging recent economic stabilisation efforts shaped by IMF conditionalities, the report argues that demand compression and fiscal tightening alone cannot deliver long-term growth. For an economy of over 240 million people, exports are not optional but essential to breaking Pakistan’s cycle of recurring economic crises, it said.