KARACHI: SITE Association of Industry (SAI) President Abdul Hadi has urged the government to reduce industrial production costs, ensure policy consistency and secure wider market access for Pakistani products, warning that shifting global trade arrangements and rising input costs are eroding the country’s export competitiveness.
In a statement on the country’s industrial outlook, he said Pakistan’s textile industry, which accounts for around 60 pc of national export earnings, was facing mounting challenges from high operating costs and intensifying international competition. Sustained export growth required investment in modern technology, improved productivity and a shift towards higher-value-added manufacturing, he added.
“Textile and apparel exports reached $18 billion in FY26, contributing approximately 8.5pc to GDP and providing employment to nearly 40pc of the industrial workforce, according to figures cited by the association. Exports rose 5.26pc year-on-year to $5.026 billion in the first quarter of FY27, but rising production costs and competition from regional exporters could undermine this growth,” he said.
Abdul Hadi said Pakistan remained heavily dependent on relatively low value-added products such as yarn, fabric and basic home textiles, limiting its ability to earn higher returns in international markets. He called for greater investment in technical textiles, branded apparel and other higher-margin products to strengthen the country’s position in global supply chains.
He also expressed concern over declining domestic cotton production, which had increased the textile industry’s reliance on imported raw materials. The cotton import bill rose 54.9pc in FY25, according to the figures provided, adding to manufacturers’ costs. He stressed the need to improve local cotton production and strengthen coordination between the agricultural and industrial sectors to ensure a reliable supply of quality raw material at competitive prices.
The SITE chief warned that changing international trade arrangements and the erosion of preferential market access could place Pakistani exporters at a further disadvantage. He said preferential access to the European Union and the United Kingdom had supported Pakistan’s textile exports, but improved access for competing countries threatened to weaken its relative competitiveness.
He described Pakistan’s GSP+ status with the European Union as an important pillar of its export performance, noting that the arrangement provides duty-free access for a substantial share of Pakistani textile and apparel exports to the European market. However, he cautioned that trade agreements involving India –EU agreement Pakistan’s relative advantage and intensify competition in key export destinations.
Abdul Hadi urged the government to strengthen trade diplomacy, pursue new export markets and take practical steps to lower the cost of doing business. He said Pakistan could not rely indefinitely on existing trade preferences and needed to improve productivity, product quality and industrial efficiency to remain competitive.
He emphasised that stable industrial policies, reliable infrastructure, affordable energy and an investment-friendly business environment were essential to expanding manufacturing and exports. He called on the federal and provincial governments to work with industrial associations to remove structural bottlenecks and encourage investment in modern production facilities.
Abdul Hadi said a clear, long-term industrial strategy focused on value addition, policy continuity and market diversification was necessary to protect Pakistan’s textile exports, strengthen foreign exchange earnings and realize the country’s broader industrial potential.
