Pakistan Textile Council (PTC) Chairman Fawad Anwar on Wednesday expressed serious concern over the implications of the recently concluded India–European Union Free Trade Agreement (FTA) for Pakistan’s export-oriented textile and apparel sector, warning the country’s already fragile competitiveness in the E.U. market now faces an existential threat.
In a statement, Anwar noted Pakistan currently exports approximately $9 billion worth of goods to the European Union, of which nearly 65% consists of value-added textile and apparel products. “Even before the India-E.U. FTA, Pakistan’s edge over India in the E.U. market was extremely thin and largely preference-driven. That narrow margin is now at serious risk,” he said.
Pakistan’s total textile and apparel exports to the E.U. stood at $6.2 billion in 2024, only marginally higher than India’s $5.6 billion. “This gap was never structural,” said Anwar. “It existed mainly because Pakistan enjoyed preferential access under GSP Plus, while India faced tariffs of up to 12% on apparel,” he added.
“With the India-E.U. FTA granting zero-duty access to Indian garments across all tariff lines, that advantage has effectively disappeared,” he said. “At the same time, Pakistan’s GSP Plus status is under intense scrutiny, with the possibility of stricter conditions or even withdrawal. The combination of these two developments places Pakistan’s E.U. exports in a highly vulnerable position,” he added.
The PTC chairman emphasized that India is now expected to rapidly expand its market share in the E.U., supported not only by tariff elimination but also by lower energy costs, more competitive wage structures, strong support for man-made fibers, and aggressive industrial incentive schemes. “In contrast, Pakistan’s exporters are being squeezed by uncompetitive energy tariffs, escalating minimum wages disconnected from productivity, and a heavy and complex tax burden,” he said.
He cautioned that unless immediate corrective action is taken, Pakistan risks losing hard-won E.U. market share, particularly in value-added segments such as knitwear, woven apparel, and made-ups, which are the backbone of industrial employment and foreign exchange earnings. “The government must recognize that this is no longer a future risk—it is a present danger,” said Anwar. “If critical cost-of-doing-business issues are not urgently resolved, Pakistan’s $9 billion export relationship with the E.U. could erode rapidly, with severe consequences for jobs, investment, and external account stability,” he warned.
In his statement, the chairman urged the government to immediately reduce tax incidence on export-oriented manufacturing; revisit wage policies to align them with productivity and competitiveness; rationalize industrial energy tariffs to regional benchmarks; and adopt an export emergency approach focused on retaining E.U. market share.
“Preferential access alone cannot sustain exports,” said Anwar. “Without decisive domestic reforms, Pakistan will struggle to compete in a post-FTA E.U. market where efficiency, scale, and cost competitiveness—not sympathy—will determine sourcing decisions,” he added.