• Seek urgent meeting with PM to address ‘restrictive policies’
• Sound alarm over tariff hurdles, supply chain disruptions
ISLAMABAD: Textile exporters have urged the federal government to reverse policy measures in the upcoming budget that are disrupting supply chains critical to sustaining over $9 billion in value-added exports.
In a joint letter to Prime Minister Shehbaz Sharif, the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) and the Pakistan Hosiery Manufacturers and Exporters Association (PHMA) requested an urgent meeting to resolve ongoing tariff-related barriers and restrictive policies that, they claim, are choking the supply chain.
A copy of the letter, seen by Dawn, outlines four key areas requiring immediate attention in the next fiscal year’s budget. The associations pointed out that recent changes to the Export Facilitation Scheme (EFS) had negatively impacted small and medium-sized enterprises (SMEs). They called for the restoration of the original scheme to ensure stability, international competitiveness and compliance with buyer needs.
The associations also demanded that the exporters’ final tax regime be restored in the upcoming budget, arguing that it would minimise compliance costs, administrative difficulties and help SME exporters maintain financial stability.
They urged the prime minister to direct the Federal Board of Revenue (FBR) to issue automated and expedited sales tax and customs rebates, as well as Drawback of Local Taxes and Levies (DLTL) and Duty Drawback of Taxes (DDT) reimbursements.
They also requested that DLTL be continued unconditionally through a simple, paperless approach to alleviate liquidity concerns.
The association advised the government to productively negotiate a zero-for-zero apparel tariff agreement with the United States to reduce Pakistan’s current 29 per cent tariffs and increase export competitiveness.
“Failure to act quickly may result in the widespread closure of export units, foreign exchange losses and increased unemployment,” the letter said, adding that these actions are critical to protecting Pakistan’s greatest employment-generating export sector and achieving $100bn in exports.
The apparel exporters emphasised that global buyers now require certified, high-performance materials, which are not readily available in Pakistan. Yet, the import of such essential raw materials remains hindered by duties and outdated regulations.
PRGMEA Regional Chairman Dr Ayyazuddin and PHMA Zonal Chairman Abdul Hameed jointly demanded a direct and immediate meeting with the prime minister ahead of the budget, warning that without urgent intervention, the country could lose out on the global shift in sourcing patterns that has opened up fresh opportunities for new exporters.
Dr Ayyazuddin emphasised that Pakistan still relies heavily on cotton-based exports — primarily denim and fleece — while nearly 80pc of global apparel trade has moved towards synthetic and functional textiles.
“We cannot expand or diversify if we do not have access to the right raw materials,” he said. “We are being penalised for importing items that are not even produced locally.”
Mr Hameed pointed out that artificial fibres, technical yarns, performance fabrics and critical trims — many categorised under HS Chapters 54, 55 and 96 — are subject to duties despite not being manufactured in the country.
“Keeping tariffs on non-available raw materials is equivalent to taxing exports before they even happen,” he said.
Former PRGMEA chairmen
Ijaz Khokhar and Sajid Saleem Minhas highlighted that SMEs were particularly vulnerable due to what they called rigid policies and a lack of flexibility in global compliance.
“We have sent a detailed letter to Prime Minister Shehbaz Sharif and the commerce ministry, outlining how certain recent policy changes, like the shortening of the Export Facilitation Scheme input period from 60 to just nine months, are unrealistic for the apparel sector,” Mr Ijaz said.
He argued that value-added exporters often operate under just-in-time and never-out-of-stock business models, requiring longer input cycles to fulfil diverse orders. He feared that current restrictions might disrupt operations and increase compliance burdens for exporters.
Mr Minhas added that the local spinning industry has not evolved to meet the requirements of today’s global fashion market. “Since we do not produce the materials our buyers demand, we should at least allow their duty-free import,” he said. “We are locking ourselves out of high-growth product categories.”
Mr Khokhar also raised that refund delays were also highlighted as a chronic problem. Exporters are facing severe liquidity shortages due to the delayed disbursement of DLTL, DDT, sales tax, and withholding tax refunds. The industry has requested an automated and time-bound mechanism for refund processing to ease working capital constraints.
Additionally, both associations emphasised the need for a strong national marketing campaign for “Made in Pakistan” garments. They urged the Ministry of Commerce to initiate global trade outreach through embassies, digital platforms and targeted business-to-business (B2B) events to increase visibility and improve brand image.
Published in Dawn, June 2nd, 2025
