ISLAMABAD: The textile industry has urged the government to immediately pursue duty-free access to the US for textile and apparel products made from American cotton, warning that new trade deals secured by regional competitors are threatening the country’s largest export market.
In an SOS letter written on Wednesday addressed to Commerce Minister Jam Kamal Khan, the All Pakistan Textile Mills Association (Aptma) cautioned that Pakistan risks losing further market share in the US as India and Bangladesh strengthen their competitive positions through preferential trade arrangements.
India, Aptma noted, has negotiated an 18 per cent tariff framework with the US, while Pakistan continues to face tariffs of around 19 per cent. Meanwhile, the EU has finalised a Free Trade Agreement with India, further boosting New Delhi’s export prospects. Most significantly, Bangladesh has secured zero-tariff access to the US market for garments and made-ups produced using American cotton -- a move that industry leaders say places Pakistan at a distinct disadvantage.
The textile sector, which accounts for the bulk of Pakistan’s exports and foreign exchange earnings, is already grappling with the highest energy tariffs, elevated input costs, high interest rates and heavy taxation in the region. Industry leaders argue that improved market access for competitors -- combined with their lower cost structures -- could accelerate the erosion of Pakistan’s export share in its most critical destination.
Aptma has proposed a reciprocal arrangement under which Pakistan would seek duty-free access for textile and apparel exports manufactured using US cotton, in exchange for significantly enhanced imports of American cotton. The association said similar proposals were shared with the Ministry of Commerce ahead of US tariff discussions in early 2025 and were also discussed with the American Embassy.
According to industry estimates, cotton imports from the US could exceed $1 billion in 2025, up from $770 million in 2024, provided facilitative measures are implemented. These include removal of redundant fumigation requirements on American cotton, a two-year waiver of infrastructure cess on cotton imports -- particularly in Sindh -- elimination of the Export Development Surcharge on exports using US cotton, and engagement with US authorities to operationalise concessions tied to a minimum 20 per cent American value addition.
Aptma has also proposed establishing free commercial zones for American cotton to reduce logistics and trade costs while ensuring uninterrupted availability for domestic manufacturers.
However, industry representatives stressed that any meaningful increase in imports and revival of domestic spinning activity remains contingent upon resolving the sales tax disparity under the Export Facilitation Scheme (EFS), which they describe as critical to restoring competitiveness.
Calling the situation urgent, Aptma has sought an early meeting with the commerce minister, warning that the global textile landscape is shifting rapidly as countries lock in preferential access through strategic trade diplomacy.
