Key Points
- Export apparel arm of Gul Ahmed to be discontinued amid margin pressures
- PTC warns new Export Facilitation Scheme amendments will “critically damage” export competitiveness
- Officials cite energy costs, policy uncertainty, and raw material exclusion as key triggers
- Industry calls for immediate relief to avert mass layoffs and supply chain collapse
ISLAMABAD: The textile sector in Pakistan is facing mounting strain, with a major company deciding to shutter its export apparel arm and the Pakistan Textile Council (PTC) issuing urgent warnings over policy changes that threaten the industry’s viability.
Gul Ahmed Textile Mills Limited, one of the country’s largest textile players, announced that it would “discontinue the business operations of the company’s export apparel segment” following a “comprehensive strategic review” and persistent operational losses, according to Business Recorder. The company cited “intense regional competition, a stronger exchange rate, recent government policy changes, … rising costs of nominated fabrics, and elevated energy tariffs” as key factors eroding profitability. It stated that this step is intended to strengthen its overall financial position and allow strategic focus on its other segments, including spinning, weaving, and home textiles.
PTC warns of export‐scheme changes and raw material exclusion
In parallel, the Pakistan Textile Council has warned that the recent amendments to the Export Facilitation Scheme (EFS), especially the removal of essential inputs like cotton, cotton yarn and grey cloth from zero-rating, could “critically damage Pakistan’s textile and apparel exports.” In a letter dated August 1, 2025, addressed to FBR Chairman Rashid Langrial, PTC expressed serious reservations regarding procedural ambiguities in exclusions (e.g. absence of specific HS codes), which are triggering confusion among exporters and customs officials alike, according to the pcma.org.pk. The Council said these changes come at a time when the sector is already under “immense external pressure.”
PTC officials claimed that closing “over 120 spinning mills and 800 ginning factories” has already occurred or is underway due to mounting costs and uncompetitive policies, as mentioned by ecotextile.com. The Council, along with industry groups, is demanding prompt clarification, a reversal or moderation of the exclusions, and safeguard mechanisms to prevent supply disruptions.
Broader erosion in export momentum
Beyond these specific developments, PTC has raised wider concerns about faltering export growth. In its recent monthly export report covering July–August 2025, the Council noted that overall textile & apparel exports were US$5.1 billion, reflecting only modest year-on-year growth. However, August alone saw exports drop 12.5% year-on-year and 10% month-on-month, spotlighting demand fragility and competitiveness. PTC warned that without bold, structural reforms, Pakistan risks losing ground to regional rivals and seeing its dominance in export share erode.
Implications & outlook
The combined developments — a marquee firm scaling back exports and policy changes undermining input cost structures — raise real concerns about job losses, pressure on downstream supply chains, and weakening foreign exchange earnings.
Industry leaders are calling on the government to reverse or revise the EFS amendments, reinstate zero-rating on key raw materials under clear guidelines, and ensure energy pricing for exporters is competitive. With the government reportedly finalising a five-year Textiles & Apparel Policy and a National Industrial Policy, stakeholders hope policy consistency and transparency may restore confidence.
Without decisive intervention, there is a risk that Pakistan’s textile backbone may begin to erode irreversibly, a scenario that could deepen structural trade imbalances and undermine long-term export trajectories.
