With over 50% of firms in the textiles and apparel sector at high risk of shutting down, the All Pakistan Textiles Mills Association (APTMA) is urgently calling on the federal government to address the surge in energy prices. Pakistan’s textiles and apparel exports face increasing competition due to soaring energy costs, with electricity prices for industrial consumers standing at 16.7 cents/kWh and gas prices set to rise to Rs2,950/MMBtu.
Economic Vulnerabilities and Impact
The escalating energy prices threaten the sustainability of the sector and have led to stagnant exports, causing Pakistan to lose market share to regional competitors such as Bangladesh, India, and Vietnam. This crisis compounds the country’s weak macroeconomic outlook, characterized by high inflation and vulnerability in the external sector, exacerbating unemployment and poverty while straining power sector revenue and the government’s fiscal position.
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APTMA highlights a decline in industrial power consumption, underscoring the need for urgent action to avert further declines. The association warns of a vicious cycle of declining consumption and rising tariffs, exacerbated by cross subsidies to nonproductive sectors. The industry is no longer able to bear the burden of these subsidies, which hinder Pakistan’s manufacturing competitiveness.
In response to the looming crisis, APTMA urgently requests a meeting with the government to discuss the industry’s precarious position and its broader economic implications. The outcome of this dialogue will be crucial in determining the government’s response to safeguarding the vital textile sector and averting widespread unemployment and social unrest.