The Pakistan Textile Council (PTC) has written to Prime Minister Shehbaz Sharif, demanding that the Export Facilitation Scheme (EFS) be retained for all legitimate export inputs, and warning that further restricting the application of the scheme to yarns and fabrics would weaken Pakistan's value-added textile exports and international competitiveness.

Key points

  • PTC Chairman Fawad Anwar signed the letter to the Prime Minister opposing the exclusion of all yarns and fabrics under Chapters 52 and 55 of the Pakistan Customs Tariff from the EFS; the letter was copied to the Chairman of the Federal Board of Revenue (FBR) and the Secretary of Commerce.
  • In 2025, the government already removed raw cotton, cotton yarn and grey fabric from the scheme through SRO 1359(I)/2025.
  • According to the Textile Exchange "2025 Materials Market Report", synthetic fibres accounted for 69% of global fibre production in 2024, while cotton fell to 19%; MMF products account for about 63% of global textile and apparel trade, while the share in Pakistan's relevant exports is only about 12%.

In the letter, PTC said it understands and supports the government's crackdown on false declarations and abuse of the EFS, but disagreed with demands for further exclusions put forward by associations representing the interests of domestic-oriented enterprises, arguing that this runs counter to the consensus reached in earlier consultations. "Accepting these demands will cause serious and lasting harm to Pakistan's value-added exports," Anwar wrote in the letter.

PTC noted that man-made fibres (MMF) continue to gain ground in the global textile and apparel market. Citing data, the council said Bangladesh plans to raise the share of MMF in its apparel exports from about 24% to 40% by 2030, and competition in this segment is intensifying. Pakistan produces almost no viscose or lyocell fibre domestically, and its polyester chain is at a disadvantage in both cost and scale compared with producers in China and Southeast Asia, so value-added exporters depend on imported MMF yarns and fabrics, many of whose specifications are designated by international buyers.

The council said the 2025 exclusion measures have already forced exporters to pay taxes in advance on relevant inputs, increasing liquidity pressure and pushing up production costs. Excluding all yarns and fabrics under Chapters 52 and 55 would further raise input costs, tie up working capital, limit access to the fibres needed for international markets, and discourage new investment in value-added and MMF capacity. PTC also warned that such restrictions could undermine international buyers' confidence in Pakistan as a reliable sourcing destination.

PTC reiterated its support for combating false declarations, under-invoicing and the diversion of EFS-imported goods into the domestic market, and said the FBR and Pakistan Customs have the legal authority, systems and personnel to investigate and prosecute violations, with recent seizures demonstrating effective enforcement. "The violations of a few cannot be a reason to punish honest exporters or dismantle a mechanism that is central to export competitiveness," Anwar said.

The council proposed to the Prime Minister that the EFS should continue to apply to all legitimate export inputs, with no further exclusions of yarns and fabrics under Chapters 52 and 55. It also recommended strengthening enforcement through input-output coefficient audits, reconciliation of planned imports with export documents, risk-based inspections and severe penalties for violators.

Addressing the concerns of domestic suppliers, PTC proposed restoring the zero-rating of local input supplies to EFS users, rather than imposing higher taxes on imported inputs. The council said textiles and apparel remain Pakistan's largest export sector, and their continued growth depends on access to the materials needed for international markets on competitive terms, and reiterated its willingness to work with the government to prevent abuse of the scheme while protecting honest exporters and the foreign exchange earnings they generate for the country.

Source: Textile Council Urges PM to Protect Export Facilitation Scheme, Warns Against Higher Export Costs · Originally published on 2026-10-13