SITE Association of Industry (SAI) President Abdul Hadi has urged the government to reduce industrial production costs, maintain consistent policies and expand international market access, warning that rising input expenses and changing global trade arrangements are weakening Pakistan’s export competitiveness.
In a statement on the country’s industrial outlook, he said Pakistan’s textile sector, which accounts for around 60% of national export earnings, faces growing pressure from high operating costs and intensifying competition. Sustained export growth, he stressed, requires investment in modern technology, higher productivity and a transition towards value-added manufacturing.
Textile Exports Grow Amid Rising Production Costs
According to figures cited by the association, Pakistan’s textile and apparel exports reached $18 billion in FY26, contributing approximately 8.5% to gross domestic product (GDP) and providing employment to nearly 40% of the industrial workforce.
Exports increased 5.26% year-on-year to $5.026 billion in the first quarter of FY27. However, Abdul Hadi cautioned that rising production costs and competition from regional exporters could threaten the sector’s growth momentum.
He said Pakistan remained heavily dependent on relatively low-value-added products, including yarn, fabric and basic home textiles. This dependence limits the industry’s ability to capture higher returns from international markets.
The SAI president called for greater investment in technical textiles, branded apparel and other higher-margin products to strengthen Pakistan’s participation in global supply chains.
Declining Cotton Production Adds to Industry Pressures
Abdul Hadi also highlighted declining domestic cotton production as a major concern for textile manufacturers. Lower local availability has increased the industry’s reliance on imported raw materials, exposing producers to additional costs.
According to the figures provided, Pakistan’s cotton import bill increased 54.9% in FY25, adding to the financial pressure on manufacturers.
He stressed the need to improve domestic cotton production and strengthen coordination between the agricultural and industrial sectors. A reliable supply of quality cotton at competitive prices, he said, would help reduce input costs and support the long-term sustainability of textile manufacturing.
Changing Trade Arrangements Threaten Pakistan’s GSP+ Advantage
The SAI chief warned that evolving international trade agreements and changes in preferential market access could place Pakistani exporters at a competitive disadvantage.
Preferential access to the European Union and the United Kingdom has supported Pakistan’s textile and apparel exports. However, improved market access for competing countries could weaken Pakistan’s relative position in key export destinations.
Abdul Hadi described Pakistan’s Generalised Scheme of Preferences Plus (GSP+) status with the European Union as an important pillar of its export performance. The arrangement provides preferential, including duty-free, access for eligible Pakistani products to the European market.
He cautioned that trade agreements involving India and the European Union could intensify competition for Pakistani exporters if competing suppliers receive improved access to the same markets.
He urged the government to strengthen trade diplomacy, pursue new export destinations and take practical measures to reduce the cost of doing business rather than relying indefinitely on existing trade preferences.
Policy Stability and Affordable Energy Key to Export Growth
Abdul Hadi emphasised that consistent industrial policies, reliable infrastructure, affordable energy and an investment-friendly business environment are essential to expanding manufacturing capacity and export earnings.
He called on federal and provincial governments to work closely with industrial associations to remove structural bottlenecks, improve industrial efficiency and encourage investment in modern production facilities.
According to the SAI president, unpredictable policies and high operating expenses can discourage investment and limit manufacturers’ ability to compete with regional producers.
He said a clear, long-term industrial strategy should prioritise policy continuity, value addition, productivity improvements and market diversification.
Value Addition Needed to Strengthen Pakistan’s Export Base
The SAI president said Pakistan must move beyond low-value-added textile production to capture greater value from its manufacturing capabilities. Investment in technology, improved product quality and the development of higher-margin product categories would be important to achieving this transition.
He stressed that stronger domestic raw-material production, competitive energy costs and wider access to international markets would help protect the textile sector’s export position.
A coordinated approach involving policymakers, industrial associations, manufacturers and the agricultural sector, he added, is necessary to strengthen foreign exchange earnings, support employment and realise Pakistan’s broader industrial potential.