Print Print edition: 2025-09-14

With 63pc of Pakistan’s overall exports: Textile sector stays dominant contributor

Published September 14, 2025 Updated September 14, 2025 11:22am

4 min

By Mushtaq Ghumman

Add BRecorder as a trusted
source on Google

ISLAMABAD: The country’s textile sector remained the dominant contributor, with exports reaching USD3.21 billion during the first two months (July-August) 2025-26, representing a strong 10 percent growth over FY25 and accounting for nearly 63 percent of Pakistan’s total exports.

According to Pakistan Textile Council (PTC), textile exports in August 2025 also faced a downturn, falling 7 percent year-on-year and 9 percent month-on-month. Within textile and apparel exports, performance varied across product categories.

Trend analysis of Chapters 50–60 (traditional textiles) showed a persistent decline, with exports falling from USD685 million in 2021–22 July–August to USD523 million in 2025–26.

However, in August 2025, a 9 percent month-on-month increase has been observed from July 2025. In contrast, Chapters 61–63 (value-added textiles) rose from USD2.28 billion in 2021–22 to USD2.69 billion in 2025–26 (+17.9 percent), reflecting a CAGR of 4.2 percent. Growth has been shown by knitwear (+16.8 percent), non-knit apparel (+10.5 percent), and other made-up articles (+10.4 percent), which collectively increased by 12.6 percent in 2025–26, underscoring the sector’s pivot toward value addition.

Textiles: investment falls even as orders peak

Pakistan’s overall exports in July-August FY25-26 stood at USD5.1 billion, showing a modest increase of 0.65 percent compared to the same period of FY24-25.

However, in August 2025, exports declined by 12.5 percent year-on-year and 10 percent on a month-on-month, underscoring short-term volatility despite long-term growth momentum.

However, in August 2025 alone, exports were recorded at USD1.25 billion, reflecting a 7 percent year on-year decline compared to August 2024 (USD1.35 billion) and a 13 percent month-on-month decline from (USD1.43 billion) July 2025.

The sector has the capacity to grow at a significantly higher CAGR, which is not being realized due to uncompetitive energy tariffs and wage policies compared with competitor countries.

Export destinations also offered a mixed performance. The European Union (EU) remained the largest market at USD1.3 billion, showing stable growth, followed by the United States at USD878 million, where exports have remained largely unchanged over the past five years.

The United Kingdom recorded a steady increase to $309 million, while exports to Bangladesh and the UAE reached USD121 million and USD101 million respectively.

Bangladesh’s imports largely consist of raw materials such as yarn and fabrics, while the UAE market displayed volatility across both apparel and fabric lines.

These trends confirm the EU’s enduring importance as Pakistan’s anchor market, while also exposing the risks of over-reliance on a narrow set of destinations.

The PTC’s monthly report of “Pakistan textile and apparel exports” has highlighted that while Pakistan’s textile exports are showing resilience and growth in value-added categories, persistent declines are being observed in cotton and other traditional textiles.

Strategic emphasis on provision of regionally competitive energy prices and wage policies, rationalization of tax rates, provision of affordable financing for costs related to compliance, diversification, innovation, and supportive trade policies will be critical for picking up export momentum and enhancing global market share.

The PTC has recommended the following policy interventions: (i) regionally competitive, predictable energy pricing for export-oriented industries; (ii) liquidity and tax friction removal; (iii) reduction in taxes, 72-hour automated refunds (risk-based post-audit), zero-rating of inputs via the Export Facilitation Scheme (EFC); (iv) alignment of wage and overtime regulations with practices in key competitor countries (eg, Bangladesh) to restore cost competitiveness; (v) time-bound incremental export rebate tied to value addition, compliance to SDGs and ESG requirements; (vi) structural reforms to improve cotton quality and yield, support for spinning and weaving sector by reducing cost of doing business in Pakistan; (vii) strengthening of EXIM Bank, enhancement in limits of EFS and LTFF and provision of financing schemes to support innovation, renewable/sustainable energy, green projects and related investments; and (viii) 5-year export/textile & apparel/industrial policy with legal cover (no ad-hoc SROs), and transparent monitoring of implementation of policies by publishing KPIs on monthly basis.

Read Comments