High cost of doing business: Exporters unable to match regional competitors

KARACHI: Pakistan’s business community is facing a serious competitiveness crisis as the cost of doing business in Pakistan is 34 percent higher compared to regional countries, which has severely undermined the ability of local industries to compete in international markets, stated Pakistan Business Forum (PBF) Chief Organiser Ahmad Jawad.

He said that due to irrational taxation, excessive energy costs, and currency instability, Pakistan’s exporters are unable to match regional competitors, resulting in stagnant exports since 2022 despite global trade recovery in several sectors.

In the present scenario, Pakistani businesses are struggling to survive, let alone expand exports, as their cost structures remain misaligned with regional economies such as Bangladesh, India, and Vietnam.

While briefing to media, Jawad emphasised that to address this alarming situation, Pakistan must immediately rationalize its taxation system, reduce the cost of electricity and gas for industry, and adopt a clear policy aimed at strengthening and stabilizing the Pakistani Rupee.He reiterated PBF’s position that the rupee should be stabilized at PKR 240 per US dollar, stating that a stronger and predictable exchange rate would help curb inflation, lower imported raw material costs, and bring stability to export and import purchase orders.

He added that continuous devaluation has failed to boost exports and has instead fueled inflation, increased production costs, and eroded business confidence.

He further remarked that it is a matter of joke and deep disappointment that over the last six years the Pakistani Rupee has devalued by nearly Rs 160 against the US dollar, a situation that reflects poor economic management rather than market fundamentals.

“Yes, for the time being the rupee is holding its position, but when we look at the country’s foreign exchange reserves, the current dollar price against the rupee is still excessively high and not truly market-driven,” he said, adding that artificial devaluation has only benefited speculative elements while damaging productive sectors of the economy.

Highlighting the crisis in the cotton sector, Chairman PBF South & Central Punjab Malik Talat Suhail expressed grave concern over the closure of more than 400 plus cotton ginning factories, which has disrupted the entire cotton value chain and negatively impacted farmers, ginners, and the textile industry.

He stated that cotton ginners are not being provided a level playing field due to the unjustified imposition of 18 percent GST on local cotton seed and oil cake, which has increased costs and reduced demand for local cotton, ultimately causing financial losses to farmers.

Malik Talat Suhail pointed out that cotton is one of the most important components of Pakistan’s import bill, and removing the 18 percent GST on cotton seed and oil cake would significantly encourage cotton cultivation in Punjab and Sindh, reduce dependency on imports, and help revive the domestic cotton economy.

He urged the government to take immediate action and issue an SRO for the withdrawal of GST on cotton seed and oil cake by February, as early cotton harvesting begins by the end of next month.

He stressed that without timely policy intervention, Pakistan risks further decline in cotton production, continued closure of ginning factories, and increased pressure on foreign exchange reserves.

The Pakistan Business Forum warned that failure to implement urgent structural reforms will lead to long-term deindustrialisation, loss of export markets, rising unemployment, and deeper economic instability.

The forum called upon the federal government, to engage with stakeholders and adopt pro-business, pro-export, and pro-farmer policies to restore competitiveness, revive exports, and place Pakistan’s economy back on a sustainable growth path.

Copyright Business Recorder, 2026