Pakistan textile union warns of capital flight to UAE, urges industrial policies to retain investment

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Updated 04 June 2025
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Pakistan textile union warns of capital flight to UAE, urges industrial policies to retain investment

  • APTMA chief urges government to remove yarn and fabric from the Export Facilitation Scheme in next budget
  • He says lack of favorable policies driving capital flight as textile exports fall over 13 percent between FY22 and FY24

KARACHI: Pakistan is facing the flight of capital, with local industrialists shifting their factories to investor-friendly Middle Eastern countries like the United Arab Emirates due to the lack of favorable industrialization policies at home, Kamran Arshad, chairman of the All Pakistan Textile Mills Association (APTMA), said on Tuesday.

APTMA represents more than 200 textile millers, which employ the country’s largest industrial workforce of more than 40 million people and account for half of the nation’s total exports. Its top official made the remark during an interview with Arab News just a week ahead of the country’s federal budget that is scheduled to be announced on June 10.

“Pakistani investors are now the second or third largest investors in places like Dubai,” he said during the conversation.

“Yes, there has been a flight of capital,” he continued, adding “had there been curbs and checks and balances on the flight of capital and favorable industrialization policies, the capital would have remained within Pakistan and it would have gone into agriculture and industry.”

Pakistan’s government is trying to turn around the country’s debt-ridden economy by curtailing imports and increasing exports with the help of the International Monetary Fund’s (IMF) loan program.

The government has emphasized its commitment to creating a more business-friendly environment in recent years, identifying textiles as a central driver in achieving a $60 billion export target by 2029 under its newly unveiled five-year economic framework.

Overall, the country’s exports rose six percent to $27 billion this year through April, but its textile exports declined more than 13 percent between FY22 and FY24 after hitting a record $19.3 billion in FY22.

Arshad maintained this was mainly due to the Export Facilitation Scheme (EFS) introduced last year that did not work well for the sector.

Originally envisaged to streamline and incentivize exports by allowing exporters duty- and tax-free access to inputs used in the production of export goods, the scheme benefited importers over local input producers by putting yarn and all varieties of fabric on the EFS.

By removing the sales tax exemption from domestically produced inputs like cottonseed and yarn while keeping imported equivalents tax-free, the scheme made local sourcing less competitive for Pakistani manufacturers.

“We fully expect that the government would be considerate and they would honor our request, our demand to remove yarn and fabric of all sorts from the EFS scheme and to create a level playing field,” the APTMA chief said.

Separately, at a news conference, he said that while hundreds of local industries had already closed, others were running at partial capacity.

“More than 120 spinning mills and over 800 ginning factories stand closed at the moment,” he said.

NO BUYER FOR US COTTON

Arshad said the government may not find buyers for the additional cotton it is expected to import from the US if the heavily taxed spinning and ginning factories continue to shut down at the current pace.

Pakistan and the US last week began negotiating their “reciprocal” trade tariffs, with Islamabad aiming to bridge its $3 billion trade surplus with Washington by buying more cotton and soybean to avoid the imposition of 29 percent tariffs on its exports to the US.

“Washington has indicated availability of up to 1.5 million bales for export to Pakistan,” the APTMA chairman told reporters at a press briefing.

In the ongoing trade talks, he said one of the offers the Americans were expected to make was the doubling or tripling of cotton exports to Pakistan, which uses cotton as a raw material for its textile industry that fetched $16.7 billion in exports last year.

The US is the biggest buyer of Pakistan’s exports, mostly textiles, which were valued at $5.44 billion last year through June, according to State Bank of Pakistan data.

US Charge d’Affaires Natalie A. Baker last month met Pakistan’s commerce minister, Jam Kamal Khan, and cited enhanced cooperation in the cotton sector as a key area for mutual growth, given Pakistan’s textile industry’s demand for high-quality cotton and the US ability to meet that demand.

“Who will buy this US cotton,” said Arshad, “while more than 120 spinning mills and 800 ginning factories have already shut down across the country.”

He noted the industry was already dealing with the carryover stocks of as much as 800,000 cotton bales from last year while the next crop was about to land.

Spinning mills consume most of Pakistan’s cotton output, which is falling and halved this year to 7.1 million bales after reaching a record 15 million bales in FY15, according to Pakistan Central Cotton Committee data.

Pakistan’s annual cotton consumption is about 15 million bales, but a poor crop made it the biggest importer of US raw cotton in FY23, when the dollar-strapped country had to spend billions on importing more than 4 million cotton bales, each weighing 170 kilograms.

Arshad said for Pakistan to absorb an increased amount of US cotton, a viable and operational spinning industry was essential.

“Without restoring competitiveness for domestic spinners, additional cotton imports will not materialize,” he added.

Pakistan’s finance adviser Khurram Schehzad declined to comment on issues related to the textile sector “before budget,” while finance ministry spokesperson Qamar Sarwar Abbasi did not respond to questions.


Suicide attack kills 13 soldiers in Pakistan’s northwest — officials

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Suicide attack kills 13 soldiers in Pakistan’s northwest — officials

  • The attack injured 29 others, including civilians, in North Waziristan district 
  • Hafiz Gul Bahadur group of the Pakistan Taliban claimed the suicide attack

PESHAWAR: A suicide attack claimed by the Pakistani Taliban killed 13 soldiers and wounded 29 people, including civilians, local government officials and police officers told AFP.

“A suicide bomber rammed an explosive-laden vehicle into a military convoy. The blast killed 13 soldiers, injured 10 army personnel and 19 civilians,” said a local government official in North Waziristan district of Khyber Pakhtunkhwa province, who asked not to be named because he was not authorized to speak to the media.

“The explosion also caused the roofs of two houses to collapse, injuring six children,” a police officer posted in the district told AFP.

The condition of four injured soldiers is critical, an administrative official added.

The attack was claimed by the suicide bomber wing of the Hafiz Gul Bahadur armed group, a faction of the Pakistan Taliban.

Pakistan has witnessed a sharp rise in violence in its regions bordering Afghanistan since the Taliban returned to power in Kabul in 2021, with Islamabad accusing its western neighbor of allowing its soil to be used for attacks against Pakistan — a claim the Taliban deny.

Around 290 people, mostly security officials, have been killed in attacks since the start of the year by armed groups fighting the government in both Khyber Pakhtunkhwa and Balochistan, according to an AFP tally.


Rescuers search for three missing 24 hours after flash floods in Pakistan’s Swat

Updated 28 June 2025
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Rescuers search for three missing 24 hours after flash floods in Pakistan’s Swat

  • The deluges swept away 17 people, of whom 11 were killed and three were rescued
  • The ongoing wet spell has delayed arrival, departure of several trains in the country

ISLAMABAD: Rescuers are still searching for three people who were swept away by flash floods in the Swat river in Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province, an official said on Saturday, 24 hours after the tragic incident.

Flooding in the river swept away 17 people early Friday, of which three were rescued, according to KP Rescue 1122 officials. The victims and survivors were tourists who reportedly hailed from Punjab and KP provinces.

The operation to find the three missing persons has been ongoing for the last 24 hours, according to Shah Fahad, director-general of the provincial rescue service.

“Rescue 1122 operation is currently underway in different areas of Swat, including Khwaza Khela, Kabal Bypass and Barikot,” Fahad said in a statement. “More than 120 personnel of Rescue 1122 are engaged in relief activities.”

Flooding in the province has also damaged 56 houses, six of which were destroyed, the KP Provincial Disaster Management Authority said on Friday.

The Pakistan Meteorological Department has warned that the risk of heavy rains and possible flash floods will remain high until at least Tuesday.

The ongoing spell of rains has also killed nearly a dozen people in the eastern Punjab province and delayed the arrival and departure of trains in Sindh province in the south.

Babar Raza, a spokesperson for Pakistan Railways, told Arab News the weather conditions had affected the railway signaling system, while the speed of trains had also been deliberately reduced for the sake of passenger safety.

“As a result, some trains are reaching their destinations with a delay of three to four hours,” he said. “No trains have been canceled so far.”

Pakistan is one of the world’s most vulnerable countries to the effects of climate change, and its 240 million inhabitants are facing extreme weather events with increasing frequency.

Last month, at least 24 people were killed in severe storms in the South Asian nation, which experienced several extreme weather events in the spring, including strong hailstorms.


Pakistan PM meets Sana Mir after ICC Hall of Fame induction, hopes she will nurture new talent

Updated 28 June 2025
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Pakistan PM meets Sana Mir after ICC Hall of Fame induction, hopes she will nurture new talent

  • A trailblazer for women’s cricket in Pakistan, Mir represented the national team from 2005 to 2019
  • She holds the record for the most wickets by a Pakistani woman in one-day internationals with 151

ISLAMABAD: Prime Minister Shehbaz Sharif on Friday met with former Pakistan Women Cricket Team captain Sana Mir and congratulated her on her induction into the International Cricket Council (ICC) Hall of Fame, Sharif’s office said.

Mir this month became the first woman cricketer from Pakistan to be inducted into the ICC Hall of Fame. She was honored alongside India’s MS Dhoni, England’s Sarah Taylor, South Africa’s Hashim Amla and Graeme Smith, Australia’s Matthew Hayden, and New Zealand’s Daniel Vettori.

PM Sharif appreciated Mir saying that the Pakistan women cricket team achieved significant successes and made Pakistan famous all over the world under her leadership.

“The government is trying to promote talent on the basis of merit in every field of sports. Giving equal opportunities and facilities to men and women in every field of sports, including cricket, is among our priorities,” Sharif was quoted as saying by his office.

“Hopefully, you will play an active role in providing training to new talent in cricket with your experience.”

Mir thanked the prime minister and said she was trying her level best to represent Pakistan fully in the World Cricket Association and the ICC.

She gave suggestions for further promotion of cricket, especially women’s cricket, in Pakistan.

A trailblazer for women’s cricket in Pakistan, Mir represented the national team from 2005 to 2019. She is the eighth Pakistani overall and just the 15th woman globally to be inducted into the ICC Hall of Fame.

She holds the record for the most wickets by a Pakistani woman in one-day internationals with 151 and was the first Asian woman to feature in 100 T20 internationals. In 2018, she became the first Pakistani woman to top the ICC ODI bowling rankings.


Arbitration court says has jurisdiction in Pakistan’s Indus waters case against India

Updated 28 June 2025
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Arbitration court says has jurisdiction in Pakistan’s Indus waters case against India

  • The South Asian neighbors have been arguing over hydroelectric projects on the shared Indus river and tributaries for decades
  • Pakistan complains that India’s planned hydropower dams will cut flows on the river which feeds 80 percent of its irrigated agriculture

ISLAMABAD: The Permanent Court of Arbitration on Friday ruled that India’s decision of holding the Indus Waters Treaty (IWT) in abeyance did not deprive the court of its competence to adjudicate Pakistan’s complaints against its neighbor.

In its supplemental award on the proceedings instituted by Pakistan against India, the court said it had previously found that once a proceeding before a court of arbitration is properly initiated, as in the present case, “there must be a strong presumption against the incidental loss of jurisdiction over the matters placed before it by subsequent acts, such as the appointment of a neutral expert.”

India announced it was putting the 1960 World Bank-mediated treaty, which ensures water for 80 percent of Pakistani farms, in abeyance a day after an attack in Indian-administered Kashmir that New Delhi blamed on Pakistan, an allegation Islamabad denies. Pakistan has previously said the treaty has no provision for one side to unilaterally pull back and that any blocking of river water flowing to Pakistan will be considered “an act of war.”

In light of the developments, the PCA issued a procedural order on May 16 and requested the parties to provide written submissions on the effect, if any, of these recent developments before the court. Pakistan filed written submissions and no submissions were filed by India, but the court said it had considered New Delhi’s position.

“The current phase of the proceedings before the Court concerns the overall interpretation and application of the Treaty’s provisions on hydro-electric project design and operation, as well as the legal effect of past decisions of dispute resolution bodies under the Treaty,” it said.

“Accordingly, the text of the Treaty, read in light of its object and purpose, does not to allow either Party, acting unilaterally, to hold in abeyance or suspend an ongoing dispute settlement process.”

The IWT grants Pakistan rights to the Indus basin’s western rivers — Indus, Jhelum, and Chenab — for irrigation, drinking, and non-consumptive uses like hydropower, while India controls the eastern rivers — Ravi, Beas, and Sutlej — for unrestricted use but must not significantly alter their flow. India can use the western rivers for limited purposes such as power generation and irrigation, without storing or diverting large volumes, according to the agreement.

On July 6, 2023, the PCA had issued its award on competence after considering India’s objections. In a unanimous decision, the court had ruled that it was competent to consider and determine the disputes set forth in Pakistan’s request for arbitration in the case. Pakistan had initiated the present arbitral proceedings before the court on August 19, 2016.

The South Asian neighbors have been arguing over hydroelectric projects on the shared Indus river and its tributaries for decades, with Pakistan complaining that India’s planned hydropower dams will cut flows on the river which feeds 80 percent of its irrigated agriculture.

The PCA noted on Friday that the principal issue concerned the implications, if any, that India’s decision to hold the treaty in “abeyance” may have on the competence of the court.

“Paragraph 16 of Annexure G to the Treaty provides that ‘[s]ubject to the provisions of this Treaty and except as the Parties may otherwise agree, the Court shall decide all questions relating to its competence’,” the PCA said.

“Accordingly, the Court found that it was for the Court — and the Court alone — to answer the question before it.”

New Delhi’s halting of the water agreement was one of a series of tit-for-tat diplomatic measures taken by both countries in the immediate aftermath of the April 22 attack in Kashmir, which resulted in a four-day military conflict between the neighbors in May.

The Pakistani government welcomed the supplemental award by the PCA in the IWT case.

“Pakistan welcomes the Supplemental Award by the Court of Arbitration in the Indus Waters matter that has been handed down today and made public on the website of the Permanent Court of Arbitration,” it said in an X post on Friday.

“Pakistan notes that the Court has affirmed its Competence in the light of recent developments and that unilateral action by India cannot deprive either the Court or the Neutral Expert... of their competence to adjudicate the issues before them.”

Islamabad said the priority at this point was for India and Pakistan to find a way back to a meaningful dialogue, including on the application of the Indus Waters Treaty.

Pakistan is “ready to engage in a meaningful dialogue with India on all outstanding issues, including Jammu and Kashmir, water, trade and terrorism,” it said, quoting Prime Minister Shehbaz Sharif’s comments earlier this week.


Pakistan eyes $700 million in freight earnings by expanding shipping fleet — maritime ministry

Updated 28 June 2025
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Pakistan eyes $700 million in freight earnings by expanding shipping fleet — maritime ministry

  • PNSC plans to add 24 vessels over three years to expand and modernize the national fleet
  • State shipper earned Rs25 billion between July and March in FY25, down 18 percent year-on-year

KARACHI: The state-run Pakistan National Shipping Corporation (PNSC) is set to buy at least 24 more vessels in the next three years to generate an estimated $700 million in freight earnings, the maritime ministry said on Friday.

Pakistan currently owns 10 ships including five double-hull Aframax oil tankers and as many Supramax and Panamax bulk carriers.

“The national carrier is now targeting to increase its cargo handling to 52 percent by volume and 43 percent by value (excluding containerized cargo) within three years,” the ministry said in a statement.

Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry announced the three-year plan in a meeting held in Islamabad to discuss the government’s business strategy to revitalize the maritime and logistics sectors.

The move is part of Prime Minister Shehbaz Sharif’s strategy to renew and expand Pakistan’s aging shipping fleet in a phased manner to enhance cargo capacity, fuel efficiency and compliance with International Maritime Organization standards, including those governing carbon emissions and ballast water management.

The plan, if implemented, would boost the revenues of the national flag-carrier, whose income from shipping business declined 18 percent to Rs25 billion ($88.5 million) in July–March this year compared to the previous one, according to PNSC’s financial results posted on the Pakistan Stock Exchange website.

Muhammad Arshad, the ministry spokesman, told Arab News that Pakistan’s current fleet will be more than doubled with the induction of 13 vessels in the first year.

Eight vessels will be bought in the second year and three in the third, which would take the total to 34 vessels in Pakistan’s fleet by 2028.

“PNSC currently manages approximately 11 percent of the country’s cargo by volume and 4 percent by value,” the ministry said.

During the meeting, the minister proposed deepening collaboration between the PNSC, Karachi Shipyard & Engineering Works and local industries for the local manufacturing of modern cargo vessels, oil tankers and container carriers.

“This initiative is expected to create skilled employment, strengthen local supply chains, boost industrial activity and rejuvenate Pakistan’s shipbuilding sector, positioning the country as a regional maritime hub,” it said.

The cash-strapped country plans to finance its modernization efforts without burdening the treasury through leveraging public-private partnerships, maritime leasing models and tapping into global green shipping funds.

The government is trying to revive Pakistan’s debt-ridden economy with the help of the International Monetary Fund and has set a tax revenue target of Rs14.3 trillion ($50 billion) for the next financial year starting July.

Last week, the prime minister directed the authorities to lease new vessels to expand the PNSC’s fleet with an aim to reduce the $4 billion annual foreign exchange burden on sea-based trade.

Pakistan looks to bolster its maritime trade capacity and reduce reliance on foreign shipping lines, which officials say significantly contributes to the country’s widening trade deficit and puts pressure on foreign exchange reserves.