Textile Council Voices Concerns over Export Scheme Amendments

The Pakistan Textile Council (PTC), a research and advocacy organization, has expressed reservations regarding recent modifications to the Export Facilitation Scheme (EFS) as communicated by the Federal Board of Revenue (FBR). The council warns that these revisions, notably the exclusion of essential raw materials such as cotton and yarn, could significantly impair the nation’s textile exports.

In a press release issued on Saturday, the PTC asserted that the FBR’s amendments via SRO 1359(I)/2025, if enacted as they stand, would “severely damage Pakistan’s textile and apparel exports at a critical juncture for the sector due to substantial external pressures.”

“The PTC earnestly appeals to the Government of Pakistan to step in and halt the implementation of these amendments until a revised version is agreed upon, reflecting the recommendations from the Prime Minister’s designated committee,” the statement read.

According to the council, despite the establishment of a high-ranking committee, led by Planning Minister Ahsan Iqbal, to assess and streamline the EFS through discussions with the private sector, the committee’s suggestions “have been completely disregarded.”

“The newly announced amendments have overridden the committee’s advice, failing to address the industry’s primary concerns. The most detrimental aspect is the removal of vital raw materials, including cotton, cotton yarn, and grey cloth, from the EFS’s purview,” the PTC stated.

The council clarified that these materials are fundamental to Pakistan’s textile industry, and their exclusion will force exporters to prepay import duties and sales tax, despite their export focus and role in generating foreign exchange.

“This essentially taxes exports,” stated Fawad Anwar, Chairman of the PTC. “It’s incomprehensible that when Pakistan is striving to stabilize its economy and attract foreign exchange, the government would take actions that impede exporters’ ability to thrive.”

The PTC conveyed that it has presented detailed objections and policy recommendations to Chairman FBR, Rashid Langrial, and has formally brought the matter to the attention of the Prime Minister’s Office, the Minister for Planning, the Minister for Commerce, and the Minister for Finance.

The council has implored the government to promptly retract the exclusion clause and reconsider other restrictive provisions that could cripple the EFS framework.

Key Objections Raised by PTC:
  • The input utilization timeframe should remain a minimum of 18 months for all EFS participants, with reconciliation statements submitted according to regulations.
  • Provisional authorization should be permitted for new EFS users based on declared capacity.
  • Bank guarantees should be replaced with insurance guarantees to lower compliance costs.
  • Toll manufacturing restrictions should be eased, including the removal of impractical 60-day limits and vendor detail requirements.
  • The proposed withdrawal of intrusive physical sampling rules should be reversed.
  • EFS coverage for cotton, yarn, and grey cloth should be maintained, as their exclusion was never agreed upon.

“These adjustments are being introduced at a time when Pakistan’s textile and apparel exports are already imperiled by increasing global protectionism, including recent reciprocal duties imposed by the United States on Pakistani goods, which are anticipated to further diminish export competitiveness,” the council cautioned.