Pakistan textile industry economic challenges

Pakistan’s textile industry is facing a multi-faceted crisis involving logistics, rising costs, and raw material shortages.

Initial challenges stemmed from maritime disruptions in the Red Sea caused by Houthi movement threats. These disruptions forced shipping companies to divert vessels away from the Suez Canal, leading to a massive surge in freight expenses. Industry representatives noted that shipping a container from Karachi to New York rose from approximately $2,000 to $9,000, a 350 percent increase. Kamran Arshad, Chairman of the All Pakistan Textile Mills Association (APTMA), warned that these delays and costs make Pakistani products less competitive against rivals in India, Bangladesh, and China.

In addition to shipping issues, the sector is struggling with a significant domestic cotton shortfall. Projected production of 6.71 million bales is roughly 30.4 percent below government targets, necessitating the potential import of 4 to 5 million bales to meet the national requirement of 14 to 15 million bales. Concurrently, the hosiery and knitwear sectors are reporting high production expenses, heavy taxation, and liquidity constraints, prompting calls for government intervention to maintain international competitiveness.