ISLAMABAD
Chairman of Pakistan Textile Council, Fawad Anwar on Monday issued an urgent appeal to the Federal Minister for Finance and Revenue, Muhammad Aurangzeb, emphasizing the critical need for immediate policy intervention to prevent for the revival of Pakistan’s textile industry.
In a letter addressed by the Chairman of PTC, Fawad Anwar, the Council highlighted the severe financial strain faced by the textile sector, which contributes nearly 60% of Pakistan’s export earnings and employs over 15 million people, said in a statements issued here.
“We believe a calibrated policy approach which can safeguard Pakistan’s textile sector from irreversible damage while still aligning with the country’s macroeconomic goals,” Fawad Anwar, Chairman of Pakistan Textile Council said.
He said that despite the positive impact of structural reforms under the IMF program, their implementation has resulted in unsustainable financial challenges for the textile industry, requiring immediate policy recalibration.
Key Concerns Raised by PTC is crippling energy Costs and industrial electricity tariffs have reached 16-18 cents/kWh, nearly double the rates in Vietnam, Bangladesh, India, and China, he said.
Chairman PTC said that as prices for captive power have surged above $13-14/MMBtu compared to $5-8/MMBtu in regional economies, with additional capacity charges and surcharges further inflating costs.
He said the working capital rates have jumped from 2% to approximately 14%. And recent IMF-driven tax policies, including minimum turnover taxes and super taxes, have increased effective tax rates to over 50%, significantly impacting profitability in this low-margin, high-volume industry.
The investment in industrial re -investments, crucial for sector survival, has become difficult due to soaring short-term interest rates, he said. PTC also warned that the continued financial stress could result in the closure of textile mills, sparking mass unemployment, civil unrest, and long-term economic instability.
He said that giving recommendations for Sustainable Sector Stability and urged the government to adopt a balanced and calibrated approach that ensures economic stability without compromising the long-term viability of Pakistan’s key foreign exchange-generating industries. Key recommendations include:
Balancing proposed reforms with global competitiveness considerations for export sectors and gradually phasing out subsidies while enhancing public infrastructure for sustainable energy pricing, he said.
He proposed reducing capacity charges by negotiating lower tariffs with power producers, especially for imported fuel-based plants and revisiting levies on captive power and ensuring regionally competitive gas rates for industrial use.
He proposed implementing a more balanced taxation framework that ensures industry viability and retains critical foreign exchange inflows. The Pakistan Textile Council remains committed to working collaboratively with the government to ensure sustainable growth for Pakistan’s textile industry, which is vital for the nation’s economic stability and long-term prosperity.
