Why Textile Exporters Are Calling It an Emergency
Pakistan’s textile industry has sounded the alarm over fast-rising electricity costs, warning that current power pricing policies are pushing exporters out of global markets. In a formal letter to the Adviser to the Prime Minister, Dr Syed Tauqir Hussain Shah, the Pakistan Textile Council (PTC) described the situation as an export emergency.
The Council noted that the latest data shows textile and apparel exports declining across almost all major product categories and key destinations, including the European Union, the United States and the United Kingdom. At the same time, regional competitors are signing new trade agreements and offering more competitive energy prices, putting Pakistan at a clear disadvantage.
Rs160 Billion Cross-Subsidies and Distorted Power Prices
At the heart of the complaint is the way industrial electricity tariffs are structured. According to the PTC, power bills for export-oriented industries include roughly Rs160 billion in cross-subsidy costs spread across XDISCOs and K-Electric. These hidden charges are used to support other consumer categories but end up sharply raising unit costs for manufacturers.
The industry argues that this structure makes little economic sense. Instead of being charged the actual cost of electricity, factories are paying inflated rates that reduce their ability to compete on price in international markets. The Council maintains that removing these cross-subsidies would allow industrial tariffs to reflect real costs, improve grid utilisation and reduce the incentive for firms to shift to expensive off-grid power solutions.
Time-of-Use Tariffs and Penalties on Base-Load Users
Beyond cross-subsidies, exporters are also unhappy with the blanket application of the Time-of-Use (ToU) tariff regime. Under ToU, industries pay different electricity rates during peak and off-peak hours. While the idea is to manage demand on the grid, the PTC says that, in practice, it is hurting businesses that run on a three-shift basis.
Export-oriented factories often provide a stable base-load for the power system by operating around the clock. However, they are being penalised through high peak-hour charges, which either force production cuts or push companies to absorb unsustainable costs. The Council points out that incremental tariff regimes are already in place, and argues that the rigid ToU framework has lost its economic justification and should be urgently reviewed.
Impact on Competitiveness and Regional Competition
The PTC’s letter warns that if nothing changes, Pakistan’s export base could weaken further. International buyers are highly sensitive to price, quality and delivery timelines. When energy costs climb, local manufacturers either raise prices—making their products less attractive—or accept lower profit margins, which undermines their ability to reinvest in technology and capacity.
Meanwhile, regional competitors are working to secure cheaper energy and better market access through trade agreements. If Pakistan fails to respond with its own reforms, the Council fears that orders may continue to shift to rival countries, leading to job losses and a deeper hit to foreign exchange earnings.
What the Textile Council Wants from the Government
Despite the serious warnings, the PTC maintains that Pakistan’s textile sector still has the capacity, skilled workforce and international relationships needed to drive an export-led recovery. However, it insists that this potential can only be unlocked if the government delivers a predictable, rational and cost-competitive energy pricing regime.
The Council has urged the authorities to remove cross-subsidy costs from industrial tariffs, revisit the ToU framework and align energy prices closer to actual costs. In its view, such reforms would stabilise production, encourage continued use of the national grid and restore some of the competitiveness that has been lost.
For policymakers, the challenge is to balance social objectives with economic reality—supporting vulnerable consumers without placing an unsustainable burden on exporters. How the government responds to the textile sector’s plea will play a major role in determining whether Pakistan’s exports recover or continue to struggle in the years ahead.
