Key Points
- Textile and clothing exports rose 5.55 per cent to $3.38 billion in July-August FY27
- Readymade garment exports up 13.59 per cent, and cotton yarn jumped 34.8 per cent
- High energy costs, weak cotton production and an ageing industrial base continue to constrain competitiveness
ISLAMABAD: Pakistan’s textile industry is showing signs of revival after several difficult years, with stronger exports and higher garment production, although high energy costs, weak domestic cotton production and structural weaknesses continue to threaten its competitiveness.
Textile exports rose marginally to $17.93 billion in fiscal year 2025-26 from $17.89 billion a year earlier, according to the Pakistan Bureau of Statistics.
The 0.26 per cent increase was modest, but it came despite pressure from production costs, financing constraints and weak competitiveness.
The beginning of FY27 has been more encouraging. Textile and clothing exports rose 5.55 per cent year-on-year to $3.38 billion in July-August, compared with $3.20 billion in the same period a year earlier.
Readymade garment exports rose 13.59 per cent to $827 million, knitwear exports rose 4.79 per cent to $1.004 billion, towels increased 6.74 per cent to $191 million, and cotton yarn exports jumped 34.8 per cent to $161 million.
Cotton cloth exports, however, fell 7.66 per cent while bedwear remained almost unchanged, showing that the improvement has not been uniform across the textile chain.
Garments and knitwear performed well because value-added products generate greater export earnings and employment than raw fibre and yarn.
The latest figures therefore point to resilience in some of the industry’s more competitive segments rather than a broad-based recovery.
Large-scale manufacturing
Manufacturing data also indicated stabilisation. Large-scale manufacturing expanded 4.98 per cent in FY26, although the overall textile group declined 0.63 per cent. Wearing apparel exports also rose by 5.49 per cent and cotton yarn posted modest growth.
In July 2026, large-scale manufacturing rose 3.03 per cent year-on-year. Textile production declined marginally by 0.03 per cent, but wearing apparel production increased 22.03 per cent, highlighting stronger momentum in downstream garment manufacturing.
Cotton production offers another potential source of relief. Cotton arrivals at ginning factories reached 2.389 million bales by September 15, up 19.17 per cent from 2.004 million bales during the same period last year. Arrivals in Punjab rose 24.73 per cent, and those in Sindh improved by 16.25 per cent.
Industry representatives projected that cotton production could exceed 6 million bales if conditions remain favourable. However, pests, rainfall, acreage and crop quality remain risks, while the recent pace of arrivals has begun to slow.
Pakistan’s cotton production has fallen sharply from a record 14.81 million bales in FY12 to roughly 5.5 million bales in recent years. The decline has increased the textile industry’s dependence on imported fibre, exposing manufacturers to international prices, freight costs and exchange-rate movements.
Energy costs remain another major constraint. Textile manufacturers have repeatedly called for competitive electricity and gas prices, tariff rationalisation and a predictable policy environment.
The government’s draft Textile and Apparel Policy 2025-30 targets textile and apparel exports of $29.381 billion by FY30, with greater emphasis on value-added products, productivity, investment, sustainability and diversification.
READ ALSO: Pakistan Textile Exports Rise 8.07 per cent in July
Diversification into man-made fibres and technical textiles could also help Pakistan reduce its dependence on cotton and access a wider range of international markets.
The latest export and production figures suggest that Pakistan’s textile industry may be moving from contraction towards stabilisation, with some segments already showing renewed growth.
But the improvement remains vulnerable to energy prices, international demand, freight costs, exchange-rate movements, working-capital availability and the country’s declining cotton base.
Therefore, the challenge is not simply to increase textile exports in the short term. But for Pakistan to build a more productive and diversified industry capable of generating greater value from the country’s industrial resources.
Pakistan’s textile revival will ultimately depend on the sustainability of recent gains in garments, knitwear and other value-added segments.
