Many textile mills in Pakistan are on the verge of closing down. This is because of a steep increase in the cost of doing business. These mills are located in Khyber Pakhtunkhwa, Lahore, Faisalabad, Multan and Karachi feel they have nothing to offer international buyers against regional competitors.

The burden of incidental taxes, provincial cess, system inefficiencies and punitive withholding tax regime has added fuel to fire. Mill owners say the government has not brought unorganised sectors into the tax net and is billing the textile industry. All these incidentals and punitive measures have hit the sustainability of textile industry in Pakistan. The federal government had imposed a surcharge of Rs 3.60 per unit to mitigate positive impact of tariff reduction by the National Electric Power Regulatory Authority. The textile industry is unable to bear this burden despite operating on independent feeders with no line losses and theft and 100 percent payment of bills.

Regional competitors are paying less than 10 cents against 14.50 cents electricity tariff in Pakistan. Most of the mills are already operating partially because of the energy mismatch at present. Millions of workers are expected to be laid off.