Power cuts, policy gaps cripple Pakistan’s Fashion and Textile industry “Moazzam Khan”

Muhammad Umar Waqas

KARACHI: Pakistan’s fashion and textile industry remains one of the country’s most critical economic pillars, contributing significantly to employment, exports, and industrial growth. Despite this importance, the sector continues to face persistent structural challenges across manufacturing, procurement, sales, and exports that limit its global competitiveness. Addressing these barriers requires not only industry-level reforms but also coordinated policy interventions and long-term strategic planning by the state.
Manufacturing Constraints
Famous fashion designer and senior expert of Fashion industry affairs Moazzam Khan says “At the manufacturing level, inconsistent energy supply remains one of the most pressing hurdles. Frequent power outages, fluctuating gas availability, and high electricity tariffs significantly increase production costs and disrupt delivery timelines. While competing regional economies benefit from subsidized and stable energy frameworks, Pakistani manufacturers are forced to absorb volatility, eroding profit margins and discouraging capacity expansion.”
He added “outdated machinery and limited access to affordable financing hinder modernization. Small and mid-sized manufacturers, especially in the fashion and value-added apparel segment, struggle to invest in automation, digital cutting, and efficient production technologies. The absence of targeted credit schemes for fashion-led SMEs further widens the productivity gap between Pakistan and competing textile hubs such as Bangladesh, Vietnam, and Turkey.”
Procurement and Raw Material Issues
Moazzam Khan says “Procurement inefficiencies also present a major challenge.
Although Pakistan is a major cotton producer, quality inconsistency, contamination issues, and fluctuating prices force many manufacturers to rely on imported raw materials. Import dependency, in turn, exposes businesses to currency volatility, delays at ports, and complex customs procedures. Moreover, the lack of organized supplier networks for trims, accessories, and specialized fabrics increases lead times and costs. For fashion brands operating on seasonal and trend-based cycles, procurement delays can result in missed market windows, excess inventory, and financial losses.”
Sales and Domestic Market Barriers
On the sales side, the domestic fashion market remains largely informal and fragmented. The absence of standardized retail policies, weak intellectual property enforcement, and rampant design copying discourage innovation and brand investment. Khan says “Formal fashion brands bear the burden of taxation, compliance, and documentation, while informal players operate without regulatory oversight, creating an uneven playing field. Furthermore, limited consumer financing options and high inflation have reduced purchasing power, particularly for value-added fashion products. Rising operational costs-rentals, marketing, logistics, and staffing-have made sustainability increasingly difficult for mid-range fashion houses trying to scale responsibly.”
Export Challenges and Global Positioning
Moazzam Khan stresses key focus on exports, he says “Exports remain the sector’s most underutilized opportunity. While Pakistan has strong manufacturing capabilities, it continues to rely heavily on low-margin bulk exports rather than high-value fashion and finished goods. A lack of branding support, weak international marketing platforms, and limited participation in global fashion trade shows restrict exposure to international buyers.”
Khan added “Over the last five years, Pakistan’s textile exports have shown little growth with some fluctuations. After peaking at around $19.3 billion in FY 2021-22, they declined to about $16.5 billion in FY 2022-23 as global demand softened and structural issues persisted. In FY 2023-24, exports remained relatively steady at roughly $16.66 billion, before rising to around $17.88 billion in FY 2024-25, a 7.4 % increase, but it’s not enough.”
He says “It has been observed that compliance requirements for exports such as sustainability certifications, labor audits, and traceability are essential but costly. Many manufacturers lack technical guidance and financial assistance to meet these standards, resulting in lost export orders. Additionally, cumbersome rebate processes, delayed refunds, and inconsistent export policies create uncertainty and cash flow stress. Policy Recommendations and the Way Forward To unlock the full potential of Pakistan’s fashion and textile industry, a shift from short-term fixes to long-term structural reform is essential.”

Moazzam Khan highlights some significant policy measures, which are include:
> Stable and regionally competitive energy tariffs for export-oriented industries
> Dedicated financing schemes for fashion and value-added textile SMEs
> Investment in cotton quality improvement and localized supply chains
> Stronger IP protection and formalization of the domestic fashion market
> Export incentives tied to branding, sustainability, and value addition
> Public-private collaboration.

“Industry stakeholders must be involved in policy formulation to ensure that regulations align with operational realities. Pakistan does not lack talent, creativity, or manufacturing skill; what it lacks is a cohesive ecosystem that allows these strengths to translate into global competitiveness. If addressed strategically, the fashion and textile sector can move beyond survival mode and become a sustainable driver of exports, employment, and cultural representation for Pakistan on the global stage.” Senior expert of Fashion industry affairs Moazzam Khan tells The Financial Daily.