ISLAMABAD: The country’s textile industry has approached the government for a better trade arrangement with the United States of America (USA), as recent agreements between New Delhi and Washington, as well as with the European Union (EU) and the United Kingdom (UK), have sent shockwaves through the already struggling sector.
In this regard, the Pakistan Textile Council (PTC) has written a letter to Prime Minister Shehbaz Sharif, while the All Pakistan Textile Mills Association (APTMA) has written to Commerce Minister Jam Kamal Khan.
In its letter, PTC referred to its earlier correspondence dated February 3, 2026, regarding the India–United States trade understanding and the implications of reciprocal tariffs for Pakistan’s textile and apparel exports. It noted India securing reduced reciprocal tariffs with the United States—alongside its recently concluded free trade agreements with the United Kingdom and the European Union—with Bangladesh also reaching an understanding with Washington.
READ MORE: 10% tariff reduction: Textile Council urges PM to engage US through all channels
Under the new arrangement, US tariffs on Bangladesh have been reduced, and selected apparel and textile products, particularly those produced using US-origin cotton and man-made fibres, are expected to receive duty-free access. These developments collectively introduce new, policy-driven cost advantages for Pakistan’s principal competitors in the US market.
Against this backdrop, PTC stated that the Prime Minister’s forthcoming visit to Washington on February 18–19 to participate in the inaugural leaders’ meeting of President Donald Trump’s Board of Peace presents a timely opportunity to engage US leadership on Pakistan’s trade and tariff concerns.
The letter contends that while the meeting’s primary focus is on Gaza’s post-war reconstruction and related humanitarian and institutional matters, the presence of heads of state and senior leadership provides an appropriate setting for parallel, constructive dialogue on broader economic and trade issues of mutual interest.
“Pakistan’s textile and apparel sector operates on thin margins and remains highly sensitive to even modest tariff differentials,” said PTC Chairman Fawad Anwar.
PTC warned that with India and Bangladesh securing preferential outcomes through proactive engagement, Pakistan risks losing price competitiveness, buyer confidence, and long-term orders unless timely corrective measures are taken.
In this context, PTC has proposed that Pakistan seek a calibrated and targeted arrangement with the United States, including a reduction to Most Favoured Nation (MFN) level tariffs through the removal of reciprocal tariffs on approximately 200 key tariff lines. These account for nearly 90 percent of Pakistan’s textile and apparel exports to the US. According to PTC, such an approach would be commercially meaningful, defensible, and aligned with precedents now established for peer competitors.
PTC also emphasized that decisive domestic reforms must complement external engagement to reduce the cost of doing business. These include further rationalization of taxes on the documented export sector, adoption of regionally competitive wage and labour policies, and the introduction of investment-linked tax credits to incentivise Balancing, Modernization, and Replacement (BMR) investments.
Together, these measures are essential to preserving Pakistan’s manufacturing base, sustaining employment, and enabling the sector to compete on quality, compliance, and reliability rather than price alone. “We believe that a coordinated strategy—leveraging high-level diplomatic engagement during the upcoming Washington visit while advancing structural domestic reforms—can protect Pakistan’s export interests, reinforce confidence among international buyers, and support the broader objective of export-led growth during the economy’s stabilization phase,” the letter added.
In its letter to the Commerce Minister, APTMA stated that major competitors have secured improved market access through new trade arrangements. India has negotiated a tariff rate of 18 percent with the United States, while Pakistan faces approximately 19 percent.
The European Union and India have also concluded a Free Trade Agreement (FTA). Most recently, Bangladesh secured zero-tariff access to the US market for garments and made-ups manufactured with American cotton.
APTMA warned that these developments pose a serious and immediate threat to Pakistan’s textile and apparel exports. The industry is already under severe stress due to the highest energy and input costs, interest rates, and taxes in the region, along with a challenging business environment. Improved market access for competitors, combined with lower input costs, risks further erosion of Pakistan’s export share in its largest market.
APTMA further noted that in the lead-up to tariff negotiations with the United States in early 2025, it had shared similar proposals with the Ministry of Commerce.
“We proposed seeking tariff concessions for Pakistani textile and apparel exports to the United States for products made with American cotton, in exchange for enhanced imports of US cotton. We also approached the American Embassy with a proposal for concessional market access,” said APTMA Chairman Kamran Arshad in his letter.
In view of the rapidly changing competitive landscape, APTMA urged the government to approach US authorities to seek duty-free access for Pakistani textile and apparel products made from American cotton. Such an arrangement, it argued, would support Pakistan’s exports, strengthen bilateral trade, and increase US cotton sales. APTMA has requested a meeting with the Commerce Minister on Monday, February 16, or Tuesday, February 17, to discuss the strategy in this regard.
Copyright Business Recorder, 2026
Comments