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Pakistan textile industry

The short answer

Pakistan's textile and apparel sector exported $18 billion in FY2025-26, roughly 60% of the country's total exports of $30.14 billion. The sector is in the middle of a structural shift: value-added goods — garments and home textiles under HS Chapters 61–63 — now account for 83.2% of textile exports, up from 77% in FY22, while exports of raw materials and intermediate goods fell 3.4% to $3.026 billion, their lowest level in five years. The sector is also constrained by a domestic cotton crop estimated at around 5.5 million bales against a peak of 14.8 million bales in 2011-12, which makes Pakistan increasingly dependent on imported cotton even as it processes more of it domestically.

Key facts

Textile and apparel exports, FY2025-26
$18.0 billionUp 0.3% from $17.95 billion the previous year. See source 1
Share of national exports
Approximately 60% See source 1
Total national exports, FY2025-26
$30.14 billionDeclined 5.9% year on year. Textiles grew slightly while total exports fell, so the sector's relative importance increased. See source 1
Value-added exports (HS Chapters 61–63)
$14.98 billion, up 1.1%Share of textile exports rose to 83.2%, from 77% in FY22. See source 1
Raw material and intermediate exports (HS Chapters 50–60)
$3.026 billion, down 3.4%Lowest level in five years. Was $4.498 billion in FY22. See source 1
Domestic cotton crop
Approximately 5.5 million balesAgainst a peak of 14.8 million bales in 2011-12. The report attributes the decline to heat stress and water shortages in major cotton-growing areas. See source 1
Largest export destination
European Union, $7.103 billionFollowed by the United States at $4.853 billion and the United Kingdom at $1.730 billion. See source 1

The structural position

Pakistan’s textile sector is best understood as a very large processing industry sitting on top of a shrinking fibre base, selling mostly into three markets.

The processing side is genuinely deep. Pakistan is one of the few countries with a complete value chain running from spinning through weaving, processing and finishing to garments, apparel and home textiles. That vertical integration is what makes it credible in categories like denim, knitwear and bed linen, and it is the reason the sector has been able to shift toward higher-value exports rather than simply exporting more fibre.

The fibre side is the problem. Domestic cotton production has fallen from a peak of around 14.8 million bales in 2011-12 to an estimated 5.5 million bales, a decline of roughly 63%. The Pakistan Textile Council attributes this to heat stress and water shortages in the main growing areas. Meanwhile the spinning capacity built to consume that crop still exists, so the gap is filled with imported cotton.

The commercial consequence is worth stating plainly, because it is widely misunderstood: “made in Pakistan” no longer implies “made from Pakistani cotton.” A buyer specifying Pakistani cotton as a provenance requirement should expect to verify it, and should expect it to cost more than the default.

The shift to value-added

The clearest trend in the data is the composition change:

FY22FY26
Value-added (Ch 61–63), share of textile exports77%83.2%
Raw materials and intermediates (Ch 50–60)$4.498bn$3.026bn

Value-added exports grew 1.1% while raw material exports fell 3.4% to a five-year low. This is the direction a developing textile economy wants to move: finished garments support far more employment and capture far more margin per tonne of fibre than exporting yarn or greige cloth.

Within the value-added segment, the growth is uneven and instructive:

  • Non-knit apparel (Ch 62) was the fastest-growing major segment, up 3.9% to a record $4.295 billion, driven by men’s and women’s cotton trousers. The report attributes this to greater demand for higher-value products and to improvements in product capability, range diversity and vertical integration.
  • Knitwear (Ch 61) declined marginally, by 0.7%, to $4.979 billion.
  • Home textiles and made-ups (Ch 63) grew 0.6% to $5.705 billion and remains the largest single segment, with towels around $1 billion and cotton bed sheets around $503 million.

What this means for a buyer is that Pakistan’s competitive strength is concentrating in woven bottoms, home textiles and knitwear basics — categories where cotton is the dominant input and vertical integration pays. It is a weaker answer for categories dominated by man-made fibres, where the data shows sharp declines across man-made filaments (−26.2%), man-made staple fibres (−8.8%) and knitted fabrics (−20.7%).

Markets, and why concentration matters

Pakistan’s textile exports go overwhelmingly to three destinations:

DestinationValue, FY26
European Union$7.103bn
United States$4.853bn
United Kingdom$1.730bn
China$644m
Bangladesh$620m

That is a genuinely concentrated book. The Pakistan Textile Council flagged it as a weakness and recommended diversification into South America, Africa and the Far East — while also calling for continuity of EU GSP+ preferential access and new trade agreements with the US and UK.

For a buyer, three consequences follow:

  1. The sector is sensitive to EU and US demand cycles, and to the administrative status of preferential access arrangements. A change in GSP+ status would affect landed costs into Europe directly.
  2. Capacity is oriented toward European and American specifications — sizing, compliance documentation, and the buyers’ own standards. This is generally an advantage for Western buyers and a friction for others.
  3. Diversification is a stated industry priority, which means buyers from under-represented markets may find more openness than the concentration figures suggest.

Constraints to price in

The report identifies a consistent set of challenges. These are the things a buyer should expect to see reflected in quotations, lead times or both:

  • High energy costs. Repeatedly identified as the sector’s principal competitiveness problem relative to regional competitors.
  • Taxation. The council recommended reducing the corporate income tax rate and accelerating sales tax and income tax refunds. Refund delays matter directly to buyers: a manufacturer waiting on a refund has working capital tied up, and some of that cost finds its way into unit prices.
  • Financing constraints, particularly for small and medium-sized enterprises — which is precisely the segment a new buyer placing a small order will be dealing with.
  • Shipping costs and transit times. Pakistan’s sea freight position is less favourable than Southeast Asia’s for many destinations, and the council recommended competitive freight rates, shorter lead times and greater capacity for the Pakistan National Shipping Corporation.
  • Domestic cotton supply, as above.
  • Market concentration, as above.

None of these make Pakistan a bad sourcing decision. They make it a decision that should be priced honestly rather than compared on unit cost alone.

What Pakistan is competitive at

Based on the export composition and the underlying capability, the categories where Pakistan is a strong answer are reasonably clear:

  • Denim and woven bottoms — the fastest-growing segment, with vertically integrated indigo dyeing, weaving and garment production.
  • Knitwear basics — T-shirts, polos, fleece, with large installed capacity.
  • Home textiles — towels, bed linen, and made-ups, the largest single export segment.
  • Cotton-rich shirting and trousers — where the cotton processing base is the advantage.

Where it is a weaker answer: man-made-fibre technical fabrics, categories requiring sophisticated synthetic fibre development, and anything demanding very short lead times to markets far from Pakistani ports.

How to approach it

For a buyer considering Pakistan, the productive sequence is:

  1. Check the category fits. If it is not cotton-rich woven or knit apparel, or home textiles, the data suggests looking elsewhere first.
  2. Confirm the fibre, not just the country. Given the cotton shortfall, specify fibre origin and expect to verify it.
  3. Model landed cost, not unit cost. Freight and transit time are material.
  4. Qualify the facility’s own position. National aggregates tell you about the sector. A manufacturer’s energy arrangements, financing position and capacity utilisation tell you about your order.
  5. Budget for the compliance overhead. Documentation, testing and certification are well developed here, and they are not free.

The research report linked below covers the export data in more detail, and the underlying dataset is published for direct use.

Pakistan textile and apparel exports, FY2025-26 — Shares are calculated as a proportion of total textile and apparel exports of $18.0bn. Non-knit apparel was the fastest-growing major segment; man-made filaments (−26.2%), knitted fabrics (−20.7%) and man-made staple fibres (−8.8%) saw the steepest declines. Source: Pakistan Textile Council, FY2025-26.
SegmentHS chaptersValueChangeShare of textile exports
Value-added, total61–63$14.98bn+1.1%83.2%
Home textiles and made-ups63$5.705bn+0.6%31.7%
Knitwear61$4.979bn−0.7%27.6%
Non-knit apparel62$4.295bn+3.9%23.9%
Raw materials and intermediates50–60$3.026bn−3.4%16.8%
— of which raw cotton52$2.486bn−1.5%13.8%
Textile and apparel, total50–63$18.0bn+0.3%100%

Data currency

This page is built on the Pakistan Textile Council's FY2025-26 annual report, published 17 September 2026. That is the most recent full-year position available. Because it is an annual report in a sector that moves monthly, treat the figures as the structural baseline and confirm current conditions before making a commercial commitment.

Limitations

  • Figures are drawn from a single annual report and describe FY2025-26 (July 2025 – June 2026). Trade data is subject to revision and more recent monthly figures may differ.
  • The report attributes the decline in domestic cotton production to heat stress and water shortages. Attribution of a single season's crop outcome to specific causes is inherently difficult, and the report does not present a formal causal method.
  • This page describes the export position and competitive structure of the sector. It does not assess individual companies, and nothing here should be read as an assessment of any specific manufacturer.
  • Capacity, capability and lead time vary enormously between facilities. Aggregate national figures are not a guide to what any particular supplier can or will do.

Sources

  1. Pakistan Textile Council — Annual Export Performance Report, FY2025-26 Pakistan Textile Council · published 17 September 2026 · data period FY2025-26 (July 2025 – June 2026) · retrieved 5 October 2026 · primary The report states that its figures are based primarily on Pakistan Single Window (PSW) and Pakistan Bureau of Statistics (PBS) data, which makes this the most direct public basis available for the figures quoted here. The report itself is the Pakistan Textile Council's annual publication.
  2. APTMA statement on textile export growth potential All Pakistan Textile Mills Association · published 2 October 2026 · data period 2026 · retrieved 5 October 2026 · secondary Industry-body projection, cited as a claim by an interested party rather than as data: APTMA's chairman stated the sector could add $3 billion in exports in the current year and $10 billion within two to three years, conditional on a "competitive and predictable business environment." The condition is doing most of the work in that sentence.