When rivals win market access while your costs stay high, “competitiveness” becomes arithmetic, not rhetoric.
Pakistan’s cotton economy is being hit by an external shock it cannot control: preferential access for Indian exports in two of the world’s richest markets. That matters because cotton and textiles compete on tight margins; small tariff differentials can decide orders.
The Cotton Ginners Forum says the risk has risen after the United States cut tariffs on Indian goods to 18% from 50% under a new trade understanding, while the European Union agreed to slash tariffs on most Indian imports over time, with textiles among the categories moving towards zero.
Domestically, the latest Pakistan Cotton Ginners Association figures show cotton arrivals of 5.545m bales as of January 31st 2026 (+0.62% y/y), but with a telling divergence: Punjab down ~3% (2.63m bales), Sindh/Balochistan up ~4% (2.915m). Mills bought 4.987m bales; exporters 178,000; saleable stocks sit near 380,000 bales. Only 16 gins operate in Sindh versus 84 in Punjab.
The forum’s warning is blunt: if Pakistan’s tax, energy, finance and refund frictions persist, the tariff gap becomes a permanent price handicap—pushing orders to India even when quality is comparable.
The policy priority is liquidity and cost parity: clear refund backlogs (or offset against super tax), stabilise input costs, and target productivity in the weakest link—raw cotton output—now expected at around 5.6m bales against a 10.2m target. Globally, supply still exceeds demand in 2025/26, limiting any price “rescue”.
