Moaaz Manzoor

The Pakistan Textile Council has welcomed recent government measures supporting exporters, including recognition of top performers and market-based financing reforms, while urging deeper structural changes to strengthen competitiveness amid fiscal constraints and intensifying global competition.

The remarks followed an event in Islamabad last week, during which Prime Minister Shehbaz Sharif recognised leading exporters, including council members, a move industry representatives described as a positive signal for the export sector operating under challenging economic conditions.

Speaking on the occasion, PTC Chairman Fawad Anwar said the recognition came at a critical juncture for the economy, noting that exporters continue to face cost pressures and tight financial conditions under Pakistan’s ongoing International Monetary Fund programme. He said acknowledging export performance helped reinforce confidence in compliance, competitiveness and value-added growth.

Anwar said the government’s recent emphasis on market-based support measures for exporters reflected a pragmatic approach, particularly given limited fiscal space. He pointed to the reduction in Export Refinance Facility rates as an example of easing financing costs without creating an additional fiscal burden.

According to the PTC chairman, the cut in the ERF rate was facilitated by a one-percentage-point reduction in the Cash Reserve Requirement, which released more than Rs300 billion in liquidity to the banking system. He said this enabled banks to absorb a 300-basis-point reduction in export financing rates while maintaining stability and profitability.

He added that the measures reflected coordination between fiscal and monetary authorities, helping improve liquidity conditions, lower borrowing costs for exporters, and sustain confidence in the banking system during a period of macroeconomic adjustment.

The council also welcomed the government’s decision to remove cross-subsidies from industrial electricity tariffs, describing it as a correction of long-standing distortions that had raised costs for export-oriented industries. Anwar said energy pricing reforms were essential for restoring competitiveness, particularly in large-scale manufacturing.

Commenting on concerns surrounding the recently concluded India–European Union free trade agreement, Anwar cautioned against exaggerated fears regarding its impact on Pakistan’s exports. He said the agreement would come into effect next year and that competition in the European market was likely to intensify, but Pakistan’s leading exporters remained well positioned.

He noted that exporters in value-added textiles and apparel had strengths in quality, compliance, sustainability standards and established buyer relationships, which could help them compete even as tariff differentials narrow.

However, the PTC chairman stressed that sustaining export growth would require deeper and longer-term reforms beyond short-term relief measures. He said Pakistan needed to focus on maintaining its GSP+ status through credible compliance and proactive engagement with the European Union.

Other priorities highlighted by the council included regionally competitive taxation through broadening the tax base, reducing the burden on documented businesses and salaried individuals, and offering investment-linked incentives to encourage private sector expansion.

Anwar also underscored the importance of maintaining a stable and market-aligned real effective exchange rate, suggesting that a range of 99 to 100 would better support exports. He added that duty-free access to export inputs and the removal of bureaucratic and procedural barriers across the value chain were necessary to improve efficiency and competitiveness.

The Pakistan Textile Council said it would continue engaging with the government to support policies aimed at translating macroeconomic stability into sustained export growth, higher employment and improved foreign exchange earnings.

Credit: INP-WealthPk