Pakistan's GSP facility by the European Union and fluctuations in the value of local currency against that of major importing countries continues to take a toll on the country's terry towel and home-textile exports. Lower global demand for terry towel and home-textile products coupled with absence of necessary policy support from the government is also responsible for the situation, say experts. These factors have resulted in almost halving terry towel exports in the last five years.

Meanwhile, local terry towel exporters fetched only $47.80 million in the 2015-16 fiscal, compared to $92.11 million in 2011-12 fiscal. Earnings from the home-textile sector almost flattened in fiscal years 2012-13 and 2013-14, while it posted a 6.38 per cent negative growth in the last fiscal year. The industry fetched $753.01 million in the just-concluded fiscal year against $906.07 million in 2011-12 fiscal, according to the Export Promotion Bureau (EPB) data.

A study conducted in 2014 by Bangladesh Foreign Trade Institute (BFTI) apprehended that Bangladesh would likely face strong competitive pressure from Pakistan following the EU GSP facility and home-textile would be the main victim of the new system. The global demand for home textiles and terry towel products is slow following the financial crisis, while locally made products are facing stiff competition with those of Pakistan and India, according to Hossain Mehmood, chairman of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA).