Pakistan textile exports edge up as sector share of national shipments rises

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Pakistan textile exports edge up

Highlights

Pakistan's total exports fall to USD 30.14 billion, but textile and apparel exports rise marginally to USD 18 billion for FY2025-26.
Woven apparel exports grow 3.9 percent to a record USD 4.295 billion, while raw/intermediate textile exports fall 3.4 percent to their lowest in five years at USD 3.03 billion.
The Pakistan Textile Council urges urgent policy measures including a corporate tax rate cut to 15 percent and enhanced export financing amid rising costs and cotton supply shortages.

Export mix shifts toward value-added products

As reported by Pakistan Business Recorder, the Pakistan Textile Council says in its first Annual Export Performance Report for July 2025 to June 2026 that total national exports fall to USD 30.14 billion from USD 32.04 billion in FY2024-25, while textile and apparel exports inch up from USD 17.95 billion to USD 18 billion.

The report says apparel and made-up articles under HS Chapters 61-63 reach USD 14.98 billion, up 1.1 percent year on year, and account for 83.2 percent of textile exports, compared with 77 percent in FY2021-22. Woven apparel under Chapter 62 posts the strongest performance, rising 3.9 percent to a record USD 4.295 billion, while other made-up articles under Chapter 63 increase 0.6 percent to USD 5.705 billion. Knitwear under Chapter 61 declines 0.7 percent to USD 4.979 billion.

By contrast, raw materials and intermediate products under HS Chapters 50-60 decline 3.4 percent to USD 3.03 billion, their lowest level in five years. The council links that weakness to Pakistan’s cotton supply base, noting the last season crop of 5.5 million bales is the smallest in three decades, far below the FY2011-12 peak of 14.8 million bales.

Greater reliance on imported cotton is adding pressure to industry costs and supply chains, the report says, reinforcing structural concerns in the upstream segment of the textile value chain.

Market pressures and policy demands

The European Union remains Pakistan’s largest textile export market, although shipments there decline to USD 7.103 billion from USD 7.248 billion in FY2024-25, with six of the top 10 products posted to the bloc showing lower sales. Exports to the U.S. show comparatively stronger momentum, rising to USD 4.853 billion, with seven of the top 10 products recording growth.

Textile exports to the UK fall to USD 1.730 billion amid stronger competition after India secures tariff-free access under the UK-India trade agreement. China and Bangladesh, key buyers of Pakistan’s raw materials and intermediate textile products, record imports of USD 644 million and USD 620 million respectively.

The council calls for urgent policy support, including cutting the corporate income tax rate to 15 percent from the current 29 percent headline rate, speeding up sales tax and deferred sales tax refunds, and automating income tax refund processing. It also urges regionally competitive energy pricing, stronger export financing support, continuity of GSP+ preferences, additional trade agreements with the U.S. and UK, improved shipping capacity, and a national cotton strategy to rebuild domestic raw material supply.

As we noted earlier, Pakistan’s push for priority-sector lending sought to expand bank credit for housing, farms, and SMEs.

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