Pakistan’s textile industry has called on Prime Minister Shehbaz Sharif to urgently address soaring production costs, delayed export financing and a severe cotton shortage, warning that the country’s largest export sector is losing competitiveness.

In a letter to the prime minister, the Pakistan Textile Council (PTC) said textile and apparel exports remained largely stagnant in FY2025-26, edging up just 0.26% to $17.93 billion from $17.88 billion a year earlier.

The industry also reported a sharp deterioration in June, with textile exports dropping 17% compared with the same month last year and 23% from May, marking the weakest monthly performance in 14 months.

The PTC said the slowdown coincides with a broader decline in Pakistan’s exports, while imports climbed to their highest level in four years, increasing pressure on the country’s external account.

The council identified elevated energy and production costs, delays in launching the expanded Export Refinance Scheme announced in the FY2026-27 budget, and a worsening domestic cotton shortage as the main obstacles facing exporters.

It noted that Pakistan’s cotton output has declined to about 5.5 million bales from a peak of 14.8 million bales in 2011-12, forcing manufacturers to rely more heavily on imported cotton. The council attributed the decline to climate pressures, water scarcity and reduced incentives for growers.

Among its recommendations, the PTC urged the government to cut employers’ EOBI contribution to 2%, revise industrial electricity tariffs, immediately roll out the expanded Export Refinance Scheme, and adopt a long-term national strategy to revive cotton production through better seed technology, support pricing, protection of cotton-growing areas and improved crop planning.

The council said these measures are essential to restore export growth, improve global competitiveness and strengthen Pakistan’s foreign exchange earnings.