The Pakistani government has its task cut out: it has to make up its mind as to whether the cotton sector can be salvaged or whether the country should transform from being a cotton producer to an importer. The recommendations emerging from stakeholders present both immediate relief measures and longer-term structural reforms necessary for sector revival.
The most urgent intervention involves addressing the tax disparity that has made domestic cotton uncompetitive. Dawn reports that the government, as mentioned earlier, is mulling over tax breaks to avert a complete collapse, with industry recommendations underscoring the urgency of immediate tax relief for producers or the imposition of equal taxes on imports to restore a level-playing field. The Food Security Ministry has endorsed these proposals, suggesting government willingness to abolish the 18% GST on domestic cotton.
However, tax relief alone cannot address the structural problems. A comprehensive approach must include investment in agricultural research and development, particularly focusing on developing climate-resilient cotton varieties and improving farming techniques. Pakistan contributes only 5% of worldwide cotton production despite high potential, with yields remaining stagnant and profitability lessening. There is substantial room for improvement.
Infrastructure development represents another critical component. Power cuts lasting upwards of 12 hours daily force mills to turn away export orders, highlighting the need for reliable energy supply systems. The government must prioritise consistent power supply to textile-producing regions, and also explore renewable energy alternatives.
Water management becomes crucial given Pakistan's increasing water scarcity challenges. Cotton cultivation requires substantial water resources, and climate change has made traditional irrigation methods less reliable. Investment in efficient irrigation systems, water conservation technologies, and drought-resistant crop varieties could help stabilise production whilst reducing environmental impact.
The financing landscape also requires some restructuring. Traditional banking approaches have proven inadequate for agricultural financing, particularly given the seasonal nature of cotton cultivation and the long-term nature of required investments. Specialised agricultural financing institutions, crop insurance schemes, and government-backed loan guarantee programmes could provide the capital necessary for sector modernisation.
International cooperation and technology transfer represent additional avenues for sector development. Countries like India, China, and the United States have achieved significant improvements in cotton productivity through technological innovation and modern farming practices. Pakistan could benefit from technology transfer agreements, joint research initiatives, and best practice sharing arrangements with leading cotton-producing nations.
The role of private sector innovation cannot be overlooked. Encouraging investment in modern ginning and processing facilities, supporting the development of cotton trading platforms, and promoting vertical integration within the textile value chain could improve efficiency and competitiveness. The Pakistan Textile Council's January 2025 MoU with the Better Cotton Initiative represents a step towards sustainable practices and international cooperation.
Export promotion strategies must be recalibrated to account for Pakistan's changing position in global cotton markets. Rather than competing solely on volume, the country might focus on developing niche markets for speciality cotton products or value-added textile goods that command premium prices in international markets.
Uneasy Days Ahead
Pakistan's cotton crisis is more than an agricultural or industrial challenge—it embodies a test of the country's ability to adapt and modernise its economic structures in response to changing global conditions. The decisions made in the coming months will determine whether Pakistan can reclaim its position as a significant cotton producer or whether it will join the ranks of nations that have lost traditional industries to policy neglect and structural inertia.
The path forward requires unprecedented coordination between government agencies, industry associations, financial institutions, and farming communities. Despite consistent failure to achieve cotton cultivation targets, the Federal Committee on Agriculture has set an ambitious production target of 10.18 million bales for 2025–26, indicating either unrealistic optimism or genuine commitment to sector revival.
Time is running short, and that window for effective intervention is rapidly closing. Each passing season without adequate support sees more farmers abandon cotton cultivation and more processing facilities close permanently. That seems ominously like Doomsday.