Textile Council Opposes Wider Restrictions On Yarn And Fabric Imports
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✧ GENERATE BRIEFING
The Pakistan Textile Council (PTC) has written to Prime Minister Shehbaz Sharif, requesting the retention of the Export Facilitation Scheme (EFS) for all legitimate export inputs. The council voiced strong opposition to proposals aiming to exclude all yarns and fabrics falling under Chapters 52 and 55 of the Pakistan Customs Tariff from the scheme. Key concerns, operational context, and policy recommendations highlighted by PTC Chairman Fawad Anwar include:Impact of Existing Exclusions: The government removed raw cotton, cotton yarn, and grey cloth from EFS coverage in 2025 via SRO 1359(I)/2025. The PTC stated these prior exclusions have already constrained liquidity by forcing exporters to pay upfront taxes on essential inputs. Shift Toward Man-Made Fibres (MMF): Synthetic fibres comprised 69% of global fibre production in 2024, with MMF products accounting for 63% of global apparel trade. Conversely, MMF-based items make up only 12% of Pakistan's textile export mix, making seamless access to imported MMF inputs essential to meet buyer specifications.
The Pakistan Textile Council (PTC) has urged Prime Minister Shehbaz Sharif to retain the Export Facilitation Scheme (EFS) for all legitimate export inputs, warning that further restrictions on yarn and fabric imports could raise production costs and weaken Pakistan’s textile export competitiveness.
In a letter to the prime minister, PTC Chairman Fawad Anwar opposed proposals to exclude all yarns and fabrics falling under Chapters 52 and 55 of the Pakistan Customs Tariff from the scheme. Copies of the letter were also sent to the chairmen of the Federal Board of Revenue (FBR) and the secretary of commerce.
Impact of Prior Regulatory Changes
The council acknowledged the government’s efforts to prevent misdeclaration and misuse of the EFS but argued that additional restrictions could hurt exporters who depend on imported materials to fulfil international orders. The government had already removed raw cotton, cotton yarn and grey cloth from the scheme in 2025 through SRO 1359(I)/2025.
The PTC highlighted the growing importance of man-made fibres (MMF) in international textile markets. Citing Textile Exchange’s Materials Market Report 2025, it said synthetic fibres accounted for 69% of global fibre production in 2024, while cotton represented 19%. MMF-based products account for around 63% of global textile and apparel trade, compared with approximately 12% of Pakistan’s exports in the sector.
Supply Chain Dependencies and Working Capital
The council said Pakistan’s limited domestic production of viscose and lyocell fibres, alongside cost and scale disadvantages in its polyester value chain, made exporters dependent on imported MMF yarns and fabrics. These materials are often specified by international buyers, leaving manufacturers with limited flexibility to substitute locally available inputs.
According to the PTC, previous exclusions have forced exporters to pay taxes upfront on affected materials, increasing working-capital requirements and production costs. Further restrictions could discourage investment in value-added and man-made-fibre production and weaken international buyers’ confidence in Pakistan as a sourcing destination.
Enforcement and Targeted Compliance Alternatives
The council supported stronger action against misdeclaration, under-invoicing and the diversion of imported materials into the domestic market. It argued that FBR and Pakistan Customs already have legal powers and enforcement mechanisms to identify and penalise offenders, and that misuse by some businesses should not result in additional burdens for compliant exporters.
As an alternative, the PTC proposed stronger input-output coefficient audits, reconciliation of EFS imports with export documentation, risk-based inspections and strict penalties for violations. It also suggested restoring zero-rating on locally supplied inputs to EFS users to address concerns raised by domestic suppliers.
The council urged the government to maintain access to the scheme for legitimate export inputs, saying predictable policies and competitive input costs were essential for Pakistan’s textile and apparel sector, a major source of export earnings and employment.
