Govt Faces Pressure from Textile Industry Over Unmet Budget Promises
The All Pakistan Textile Mills Association (APTMA) has called on Finance Minister Muhammad Aurangzeb to immediately implement the tax reforms promised in the Federal Budget 2025–26. In a formal letter, APTMA reminded the government of its commitment to impose 18% sales tax on all cotton fiber, yarn, and greige fabric imports, while keeping these under the Export Facilitation Scheme (EFS).
Local Industry Losing Ground
APTMA stated that their initial request was for a complete exclusion of these items from the EFS, given the damaging impact of unrestricted imports on local manufacturers. However, they agreed to the government’s commitment of equalizing tax treatment between imported and local supplies for export purposes.
Despite this, it’s been over six weeks since the budget speech and nearly three weeks since its passage, yet the promised SRO (Statutory Regulatory Order) has not been issued. The tax implementation date of 15th July, decided by the Deputy PM’s Committee, has also passed without action.
Cotton Crop Faces Crisis
APTMA warned that the delay is hurting local cotton growers, as the new crop is ready but buyers are absent from the market. The continued tax disparity has made imported cotton and yarn more attractive, leaving domestic products unsold and creating uncertainty for traders and mills alike.
Textile Exports vs Imports
Textiles account for over 50% of Pakistan’s total exports and have shown positive growth, with an increase of $1.5 billion in FY25. However, the sector’s imports also jumped by $1.5–2 billion, negating gains and putting additional pressure on the balance of payments.
Economic Risk and Policy Mismatch
APTMA emphasized that the current account stability is only temporary, supported by low global oil and gas prices. This fragile balance cannot be sustained. For long-term growth, Pakistan must boost domestic value addition, but the existing import friendly policies are working against this goal.
APTMA Calls for Immediate Action
APTMA has urged the government to take swift action to fulfill its budget commitments, stabilize the local textile value chain, and support Pakistan’s economic recovery through a fair and consistent taxation policy.
