Pakistan’s Business Costs 34% Higher Than Neighbors, Warns PBF

ISLAMABAD: Everyday Pakistanis feel the pinch when jobs get scarce, and prices stay high — now a major business group says the real cost of running a company here is about 34% steeper than in nearby countries like Bangladesh, India, and Vietnam, putting local factories and exporters at a tough disadvantage in the global race.

The Pakistan Business Forum (PBF) raised the alarm on Thursday, pointing to high taxes, expensive electricity and gas, and an unstable rupee as the main culprits behind this gap. With exports barely moving since 2022 even as world trade picks up in many areas, businesses are fighting just to stay afloat rather than grow and create more jobs.

• Cost of doing business in Pakistan ~34% higher than regional peers (Bangladesh, India, Vietnam), per PBF analysis.
• Exports stagnant since 2022 despite global recovery in key sectors.
• Main issues: Irrational taxation, high energy tariffs, currency volatility (rupee devalued ~Rs160 vs. dollar over six years).
• PBF Chairman Ahmad Jawad calls for rupee stabilization at Rs240 per dollar to curb inflation, lower import costs, and boost export confidence.
• Cotton sector crisis: Over 400 ginning factories closed; 18% GST on local cottonseed and oil cake blamed for higher costs and lost demand.
• Urgent ask: Withdraw 18% GST on cottonseed/oil cake by February to revive cotton farming in Punjab/Sindh and cut import reliance.

PBF Chief Organiser Ahmad Jawad explained that these high costs make it hard for Pakistani goods to compete abroad — exporters face steeper bills for power, taxes, and raw materials, while competitors in the region keep prices lower and win more orders. He stressed that endless rupee weakening hasn’t helped exports; instead, it has driven up inflation, raised production expenses, and shaken business trust.

The textile heart of Pakistan — especially cotton — is hurting badly. Over 400 ginning factories have shut down, disrupting the chain from farmers to mills. PBF South and Central Punjab Chairman Malik Talat Suhail highlighted how the 18% GST on local cottonseed and oil cake makes homegrown cotton more expensive than imports, hurting farmers’ incomes and pushing mills to look elsewhere. Removing this tax quickly, he said, could encourage more planting in Punjab and Sindh, reduce the import bill for cotton (a major drain on dollars), and help revive jobs across the value chain.

When businesses struggle with high costs, factories slow down, jobs disappear, and prices for everyday goods stay elevated. A healthier business environment — with fairer taxes, cheaper energy, and a stable rupee — could mean more factories running, more employment, and steadier prices at the market. The PBF is urging the government to act fast: talk to stakeholders, cut unnecessary burdens, and put policies in place that help exporters win back markets and keep the economy growing.

Pakistan has the talent, hardworking people, and potential to compete strongly — but fixing these cost hurdles is key to turning that potential into real progress for families everywhere. The forum’s call is clear: timely reforms now can prevent deeper troubles and pave the way for sustainable growth.