The garment industry in Pakistan may eventually close down. So says Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA).

Among the problems it lists are continued delays in sales tax refunds and restrictions on import of raw material by the garment industry. PRGMEA says if exporters cannot procure and purchase raw materials and other accessories to fulfill their future export orders this will ultimately cause the entire export trade to collapse. Though the central bank had officially removed restrictions on imports of raw materials, constraints still continue to haunt the garment industry, leading to a severe shortage of raw material. Several units have already slashed production. The sector is also facing a severe liquidity crunch due to delayed refunds. Exporters’ refunds payment orders were supposed to be issued in 24 hours while refunds were supposed to have been cleared within 72 hours but practically these commitments are not being fulfilled and the 72 hours have now extended to several months.

Meanwhile Pakistan’s cotton production for the year 2022-23 is estimated to fall by 43 per cent compared to the past year.The primary reason for this year’s situation is the devastating monsoon floods that damaged major cottongrowing regions. Pakistan is the fifth largest cotton producer globally but the country will need to import at least five million bales in the ongoing fiscal year to meet the demand from the textile sector.