The costs of doing business in Pakistan is around 34 per cent higher than in comparable regional economies, creating a serious competitiveness challenge for local industry, the Pakistan Business Forum (PBF) said on Thursday.
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In a statement, the forum warned that elevated operating costs had significantly weakened the ability of Pakistani firms to compete in international markets. It attributed the situation to irrational taxation policies, high energy prices and persistent currency instability, which have kept exports stagnant since 2022 despite a broader recovery in global trade.
PBF Chairman Ahmad Jawad said businesses were struggling to survive, let alone expand exports, as their cost structures remained misaligned with those of regional competitors such as Bangladesh, India and Vietnam. He urged the government to immediately rationalise the tax regime, reduce electricity and gas tariffs for industry and adopt a clear policy to stabilise the rupee.
— Pakistan Business Forum (@pbfpakistan) January 22, 2026
Mr Jawad proposed stabilising the exchange rate at Rs240 per dollar, arguing that a predictable and stronger currency would help contain inflation, lower the cost of imported raw materials and bring certainty to export orders. He said repeated devaluations had failed to boost exports and had instead raised production costs, weakened business confidence and fuelled inflation.
The PBF noted that over the past six years, the rupee had depreciated by nearly Rs160 against the dollar, reflecting weak economic management rather than market fundamentals. While the currency had recently remained stable, Mr Jawad said the prevailing exchange rate was still not fully market-driven given the country’s low foreign exchange reserves.
The forum also highlighted a deepening crisis in the cotton sector. PBF Chairman for South and Central Punjab Malik Talat Suhail said more than 400 cotton ginning factories had shut down, disrupting the value chain and hurting farmers and the textile industry. He criticised the imposition of 18 per cent GST on cottonseed and oil cake, calling for its immediate withdrawal to revive domestic cotton production and reduce import dependence.
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The PBF warned that failure to implement urgent reforms could result in long-term deindustrialisation, job losses and deeper economic instability.