PTC urges govt to preserve EFS for all legitimate export inputs

ISLAMABAD  –  The Pakistan Textile Council (PTC) has written a letter to Prime Minister Muhammad Shehbaz Sharif, urging the government to preserve the Export Facilitation Scheme (EFS) for all legitimate export inputs and to reject demands for the exclusion of all yarns and fabrics falling under Chapters 52 and 55 of the Pakistan Customs Tariff.

Copies of the letter, signed by PTC Chairman Fawad An­war, have been sent to the chairman, Federal Board of Revenue, and the secretary, Ministry of Commerce. In the letter, PTC appreciated the Government’s actions to curb misdeclaration and misuse of EFS and expressed full support for them. It noted, however, that associations representing businesses focused on the do­mestic market are now seeking further exclusions, following the removal of raw cotton, cot­ton yarn and grey cloth from the scheme in 2025 through SRO.1359(I)/2025. PTC point­ed out that these demands are contrary to the understanding reached during earlier consul­tations that no further exclu­sions would be sought.

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“Accepting these demands would cause serious and last­ing harm to Pakistan’s value-added exports,” Chairman Fawad Anwar stated in the let­ter. PTC highlighted that global textile and apparel demand has moved firmly towards man-made fibres (MMF). According to Textile Exchange’s Materials Market Report 2025, synthetic fibres accounted for 69 per­cent of global fibre production in 2024, while cotton’s share fell to 19 percent. MMF-based products account for about 63 percent of global textile and apparel trade, but only about 12 percent of Pakistan’s textile and apparel exports. Compet­ing countries are expanding rapidly in this segment, with Bangladesh targeting an in­crease in the MMF share of its apparel exports from about 24 percent to 40 percent by 2030.

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The letter noted that Paki­stan has almost no viscose or lyocell fibre production, while the domestic polyester value chain carries cost and scale disadvantages against Chinese and ASEAN producers. Value-added exporters therefore rely on imported MMF yarns and fabrics, many of which are specified by international buyers, to secure and deliver orders. PTC warned that the 2025 exclusions already re­quire exporters to pay taxes upfront on those inputs, add­ing to liquidity pressure and production costs. Excluding all yarns and fabrics under Chap­ters 52 and 55 would raise in­put costs and lock up working capital for apparel and made-ups exporters, restrict access to the fibres that drive global apparel demand, discourage investment in new value-add­ed and MMF-based capacity, and weaken buyer confidence in Pakistan as a stable sourc­ing destination. On misuse, PTC reiterated its full support for firm action against mis­declaration, under-invoicing and diversion of EFS imports into the domestic market.

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