Pakistan’s textile industry is facing an unprecedented crisis as high taxes and steep electricity and gas tariffs have forced 144 textile mills across the country to shut down. Reports suggest that nearly half of the textile sector has become non-operational, while many of the remaining units are operating at minimal capacity.
According to APTMA Chairman Kamran Arshad, the excessive tax burden and uncompetitive energy prices have made Pakistan’s electricity and gas tariffs the highest in the region, severely undermining the competitiveness of its export-oriented textile industry. He further noted that while some mills continue to operate, they are under extreme financial stress, and several multinational companies are exiting Pakistan, signaling growing economic concerns.
The slowdown in industrial activity has raised serious concerns because the textile sector is Pakistan’s largest foreign exchange earner. The Pakistan Textile Council (PTC) reported that textile exports fell by 3.83 percent in the first quarter of the current fiscal year to USD 7.61 billion. In September alone, exports declined sharply by 11.71 percent year-on-year, totaling USD 2.51 billion.
As a consequence of this deteriorating environment, Gul Ahmed Textile Mills has shut down its export apparel segment, affecting thousands of workers. Several major global corporations, including Procter & Gamble, Microsoft, and Shell, have either exited Pakistan or significantly reduced operations, highlighting the challenges posed by high energy costs, excessive taxation, and policy uncertainty.
The Pakistan Textile Council has urged the government to implement immediate structural reforms. Failure to act promptly could lead to further factory closures, job losses, reduced exports, and a sharp decline in both domestic and foreign investment.
