Pakistan Faces Economic Shock as Exports Plunge 38%; Business Leaders Warn of Industry Collapse

Mian Anjum Nisar, chairman of the Businessmen Panel, blamed inconsistent government policies, high production costs and rising energy tariffs for eroding the competitiveness of Pakistani exporters. He said excessive taxation and delayed refunds have further strained businesses already struggling to survive in international markets. The agricultural sector has been hit hard by declining per-acre yields of major crops such as wheat, rice and cotton. Industry representatives pointed to poor investment in research, weak policy planning and problems such as smuggling and hoarding as key factors undermining export capacity.

Pakistan’s textile sector, which accounts for roughly 60 percent of total exports, is also under pressure. Reduced cotton output, quality issues and high energy costs have weakened value addition and reduced the sector’s share in global markets, business leaders said. The Businessmen Panel criticised short-term and piecemeal policy measures, arguing that they have failed to arrest the export slump. It called for comprehensive reforms, including rationalisation of energy prices, simplification of the tax system, removal of exporters from the final tax regime and timely payment of export rebates.

Concerns were also raised over provincial levies such as infrastructure cess, which exporters say has added to their cost burden without delivering visible benefits. Economists warned that a prolonged export decline could increase pressure on the Pakistani rupee, fuel inflation and weaken industrial output, potentially creating a cycle of reduced production and shrinking foreign exchange earnings. With regional competitors strengthening their export bases, business leaders urged the government to take urgent corrective steps to stabilise exports, protect industries and prevent further economic damage.