Pakistan’s leading export associations have sounded the alarm over recent budgetary changes that they say threaten to derail the country’s $11 billion value-added export-oriented industry—contributing nearly a third of national exports—at a time when global opportunities are shifting in Pakistan’s favour.
In a joint appeal to Prime Minister Shehbaz Sharif, the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), in coordination with several sectoral bodies including PHMA, SIMAP, PSGMEA, PGMEA, PLGMEA, PCSUMEA and the Sialkot Chamber of Commerce and Industry (SCCI), demanded immediate policy reversals to prevent what they termed as “irreparable damage.”
The associations have called for the urgent restoration of the Final Tax Regime (FTR) and the Export Facilitation Scheme (EFS) to their previous structures, warning that recent policy changes have created uncertainty, raised compliance costs, and eroded Pakistan’s competitiveness in global markets.
The signatories to the statement include prominent business leaders such as PRGMEA Chairman Dr Muhammad Ayyaz Uddin, SCCI President Ikram ul Haq, and PSGMEA Chairman Khawaja Masud Akhtar—whose company has supplied footballs for the FIFA World Cup—as well as SIMAP Chairman Zeeshan Tariq, and other office bearers representing leather goods, surgical instruments, sportswear, and apparel exporters.
In their statement, the associations argued that despite the government’s stated policy of “export-led growth,” the recent federal budget speech did not reflect this vision. “The finance minister mentioned the word ‘export’ only once, and that too in a negative context—referring to the imposition of duties on imported yarn under EFS,” they said.
The exporters criticised the dismantling of the FTR, once praised for its simplicity and predictability, which has now been replaced with a documentation-heavy regime involving audits and delayed refunds—particularly affecting small and medium-sized exporters.
“The abolition of the FTR has introduced red tape that SMEs are ill-equipped to handle,” said the statement. “The government has replaced a straightforward taxation mechanism with a system that is bogged down in procedural complexity.”
Exporters also expressed frustration over the breakdown of the EFS, which was initially designed to allow duty- and tax-free import of inputs for export production. They noted that new conditions imposed under the scheme are blocking access to critical raw materials, hurting delivery timelines and customer satisfaction.
“Global buyers need consistency and clarity. Pakistan had the chance to capitalise on trade diversions from China, but current policies are driving those opportunities away,” the associations warned. “The EFS in its present form is restricting access to vital inputs and reducing our ability to meet export deadlines.”
The associations urged the prime minister to immediately convene an emergency meeting with major export bodies and the Sialkot Chamber before the passage of the federal budget. “If this situation persists, Pakistan’s most reliable source of foreign exchange will be compromised,” they stated.
They emphasized that they are not asking for subsidies or exemptions but for a “level playing field.” With mounting production costs and declining ease of doing business, exporters say it will be impossible to achieve the government’s long-term export targets, such as the stated goal of reaching $100 billion in exports.
The joint statement concluded with a broader policy recommendation: “Pakistan must move beyond its overdependence on cotton and adopt a diversified, innovation-driven approach, particularly in apparel and technical textiles.”
The plea from the export sector comes amid broader concerns over Pakistan’s trade policy direction, as the country seeks to stabilise its economy while negotiating a fresh programme with the International Monetary Fund and repositioning itself as a competitive manufacturing hub in South Asia.
