Pakistan's textile industry is facing a severe crisis, as the All Pakistan Textile Mills Association (APTMA) has warned that exports could fall by $3 billion this year compared to last year.

Textile exports for February 2023 stood at $1.2 billion, whereas the industry could generate $1.7 billion per month in line with last year's exports. Despite investing $5 billion in additional capacity, the industry remains non-operational due to forex issues and a lack of energy.

The moratorium on the import of raw materials and essential spare parts, a lack of adequate energy supply, and the failure of the sales tax refund system have contributed significantly to the closure of over 50% of the industry. Pakistan could fall short by $3 billion in textile exports from last year's $19.4 billion exports, is crisis is not dealt with.

Furthermore, APTMA urged the authorities to clear all imports of the export-oriented sector and allow them to open Letters of Credit without hindrance for raw materials, machinery, spare parts, and other items to restore the industry's supply line.

The crisis in Pakistan's textile industry is occurring against the backdrop of a dire economic situation, characterized by a balance-of-payments crisis as the country struggles to service high levels of external debt amid political chaos and deteriorating security. The country is also grappling with skyrocketing inflation, a plummeting rupee, and a severe shortage of US dollars, which has led to a decline in industry.