Pakistan’s Silent Backbone -

By Syed Mubashir Shah

For years, the unrelenting buzz of the power loom was the real beating heart of Pakistan’s economic existence. As such, although the share of the textile industry in terms of GDP contribution is only around 8.5%, its actual contribution determines the economic stability of the nation. It contributes almost 60% of the foreign exchange earnings, 46% of the manufacturing sector production, and more than 40% of the industrial labor force. There is no question about it being the real backbone of Pakistan. However, now stepping into any industrial area of Faisalabad, Karachi, and Peshawar leaves one struck by a deafening silence.

This is not a routine dip in the business cycle; it is a structural collapse happening in real time.

The mathematics of this industrial decline are as clear as they are painful. Pakistani manufacturers currently struggle under a production cost penalty that is roughly 34 percent higher than that of regional competitors like Bangladesh, India, and Vietnam. While state authorities set ambitious export targets, Pakistan’s textile export earnings flatlined at $17.93 billion by the close of the 2025–26 fiscal year, showing a nominal growth of just 0.26 percent. The situation deteriorated sharply in June 2026, with monthly textile exports plunging by 16.71 percent year-on-year. Unable to absorb continuous cash-flow shocks, over 150 major textile mills and more than 400 cotton ginning factories have permanently shuttered, converting thriving commercial ecosystems into industrial graveyards.

The crisis runs deeper than just factories; it starts at the farm level. Pakistan’s domestic cotton production—the key raw material that fueled our historical industrial growth—has fallen from its previous highs to just 5.5 million bales. Our farmers are not at fault. Dealing with erratic weather, severe water shortages, and rising costs for fertilizer and diesel, they have shifted their focus. They are leaving cotton farming for more reliable, stable food crops and sugarcane. To fill this huge gap in raw materials, mills have to turn to costly foreign imports, depleting our fragile foreign exchange reserves and pushing production costs even higher.

Yet, the central impediment to the sector is a dual domestic force: policy inconsistency and regional trade isolation. No industrialist can formulate a viable business blueprint when fiscal rules shift with every quarterly IMF review, and energy prices fluctuate unpredictably. Meanwhile, a profound tragedy lies in how we have systematically severed ourselves from our geographical neighbors.

An export economy cannot thrive under bad conditions in its immediate surroundings. The extended closure of key western border crossings with Afghanistan since late 2025 has caused a $1.4 billion loss to Pakistan’s trade network, leaving local traders with significant losses from stranded cargo and spoiled goods. In addition to losing a market for finished products, we lost quick access to cheap, quality Afghan cotton that historically supported our spinning mills. By maintaining strained trade relationships with regional neighbors like India, Iran, and Afghanistan, we have effectively backed our economy into a corner, while global buyers turn to alternative suppliers in more stable markets.

Pakistan possesses a massive youth bulge, yet our young population faces record levels of unemployment. When a single textile factory closes its gates, it cuts off the livelihoods of thousands of young laborers, weavers, tailors, and transport workers. Reviving the textile sector does far more than generate dollars—it creates the entry-level and skilled jobs desperately required to absorb our youth and lift vulnerable families out of poverty

In order to save our national export machine, the country needs to make some urgent legal structural changes in the state. It is essential that the government instruct NEPRA to adjust industrial utility charges according to their actual cost in order to ensure regional competitiveness. Moreover, having a uniform five-year export policy is important to safeguard the liquidity of the businesses against the arbitrary tax changes. In the agricultural sector, it is crucial to treat the falling trend as a national emergency by introducing drought-resistant seeds and steady support prices. Lastly, the permanent opening of trade crossings such as Torkham and Chaman is essential in order to repair broken supply chains.

The whole problem regarding the textile industry is created by humans only, as the reasons for the problem are excessive utility costs, heavy taxes, neglect of agriculture, and blockage of borders. Saving the industry will not help a few rich factory owners but will save the national currency, economy, and future of Pakistan’s youth.