New Delhi, Jan 4 (NationPress) The textile industry in Pakistan, a crucial pillar of the nation’s exports and industrial workforce, is teetering on the edge of failure as numerous workers face layoffs and factories are forced to close.

In a letter addressed to Prime Minister Shehbaz Sharif, the Pakistan Textile Council has implored the government to declare an “Export Emergency” in order to halt the swift decline in competitiveness that now jeopardizes exports, employment, and macroeconomic stability, as reported by Pakistan’s Business Recorder.

“This warning could not be more urgent or concerning. In November 2025, Pakistan’s exports fell by over 14 percent year-on-year, marking the fourth consecutive month of decline. For the first five months of FY26, exports dropped to $12.8 billion from $13.7 billion the previous year, while imports surged past $28 billion. The resulting trade deficit—nearly $15.5 billion in just five months—highlights a precarious imbalance. In November alone, a deficit of $2.86 billion was recorded, which is 33 percent higher than the same month last year,” the report stated.

The crisis is attributed to the uncompetitive cost structure of Pakistan’s textile sector. Factors such as energy pricing disparities, inconsistent taxation, delayed refunds, and unpredictable policy signals have conspired to reduce profit margins to untenable levels. Competing textile exporters in Bangladesh, Vietnam, India, and even Sri Lanka benefit from lower energy rates, stable tax frameworks, and targeted export incentives, according to the report.

The textile sector accounts for over 60 percent of Pakistan’s total exports and provides employment to millions, both directly and indirectly. A single percentage point decrease in textile exports has a cascading effect—diminishing foreign exchange earnings, weakening the rupee, increasing inflationary pressures, and amplifying fiscal stress. Therefore, the slowdown in exports is not merely a sectoral concern; it poses a significant risk to the nation’s economy, as per the report.

The report also emphasizes the necessity for credible policy. Exporters engage in long-term investments—machinery, skills, market access—and cannot function amidst persistent regulatory uncertainty. Frequent modifications to duties, tariffs, and incentives erode confidence and drive buyers towards more dependable suppliers. Once lost, export markets are challenging to recover.

The report asserts that Pakistan’s recent economic stabilization measures, primarily influenced by IMF conditions, have prioritized demand reduction and fiscal austerity to stabilize the economy. However, an economy comprising over 240 million individuals cannot stabilize itself into prosperity. Exports are not a luxury; they are the sole sustainable pathway out of recurrent crises,” it added.