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Pakistan's Textile Exports Decline Sharply, with Urgent Need for Reforms

Strategic Insights

— 2 min read

Pakistan's textile industry, a backbone of the country's economy, has shown alarming signs of decline, with exports plummeting 12.5% year-on-year in August 2025. Despite accounting for nearly 63% of Pakistan's total exports, the sector's performance has been marred by persistent declines in traditional textiles and stagnant exports to key markets like the United States.

The Pakistan Textile Council (PTC) has sounded the alarm, urging the government to implement regionally competitive policies, remove bottlenecks, and adopt structural reforms to boost exports. The PTC's recommendations include predictable energy pricing, liquidity and tax reforms, and support for HS 50-60 sectors.

Key Takeaways:

  • Pakistan's textile exports declined 12.5% year-on-year in August 2025, with a 10% month-on-month decline, underscoring continued volatility in external trade.
  • Exports of textile and apparel sector were recorded $3.21 billion in July-August 2025, up 10% compared to the previous year, but plunged to $1.53 billion in August 2025, marking a 7% year-on-year and a 9% month-on-month fall.
  • Persistent decline in traditional textiles (HS 50-60) continues, falling from $685 million in FY22 to only $523 million in FY26, with cotton exports alone dropping 3.5% and knitted fabrics down 32.7%.
  • Value-added textiles (HS 61-63) also dipped in August 2025, with knitwear, non-knit apparel, and made-ups collectively falling 13% month-on-month.
  • The EU remains Pakistan's largest market at $1.3 billion, while exports to the United States have stagnated over the past five years at $878 million, reflecting lost competitiveness.
  • The government has been urged by the PTC to adopt regionally competitive and predictable energy pricing, liquidity and tax reforms, support for HS 50-60 sectors, financing facilitation, and policy stability to boost exports.

Statistics:

  • Pakistan's total exports stood at $5.1 billion in July-August 2025, reflecting a negligible growth of 0.65% compared to the same period last year.
  • Exports of textile and apparel sector to EU were $1,020 million in 2021-22 and are at $1,303 million in 2025-26.
  • Exports to EU show generally a stable trend over the five-year period, with no significant decline.
  • Exports to the United States were $894 million in 2021-22 and remained at $878 million in 2025-26, reflecting a marginal decline.
  • Exports to the United Kingdom show an overall increasing trend across the five-year period, with a 7.3% increase from $288 million in 2021-22 to $309 million in 2025-26.
  • Exports to Bangladesh show a declining trend from 2021-22 to 2023-24 and then a slight pickup in 2024-25 and 2025-26.

Sources:

  • Pakistan Textile Council's Monthly Report on Textile and Apparel Exports (July-August 2025)
  • Report titled "Pakistan's Textile Exports Decline Sharply, with Urgent Need for Reforms"
  • Pakistan Textile Council

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