Pakistan's Textile Exports Post Mixed Performance in May

Strategic Insights -

Pakistan's textile exports, the country's largest export-earning sector, showed a mixed performance in May 2025, with a 2% year-on-year decline in total exports to $1.53 billion, primarily driven by reduced shipments of cotton yarn and basic textile products. However, the sector posted a strong month-on-month recovery, surging by 25% compared to April 2025. The resilience of value-added textile exports and other textile products was notable, but the industry's performance remains susceptible to domestic supply constraints and global market dynamics.

Key Takeaways:

  • Pakistan's textile exports declined by 2% year-on-year in May 2025, totaling $1.53 billion, mainly due to reduced shipments of cotton yarn and basic textile products.
  • The sector posted a strong month-on-month recovery, surging by 25% in May 2025 compared to April 2025, driven by improved shipments of cotton yarn, value-added textile products, and made-up articles.
  • Basic textile exports showed a notable fall on a yearly basis, totaling $181 million, a decline of 24% year-on-year.
  • Value-added exports demonstrated resilience, posting a marginal 2% year-over-year increase to $1.2 billion.
  • Other textile exports rose to $177 million, despite a 34% year-over-year decline in domestic cotton arrivals due to poor crop output.
  • Cotton imports during the first eleven months of FY25 reached $1.18 billion, showing a substantial increase of 2.2 times compared to $370 million in the same period last year.
  • The government's recent move to impose an 18% sales tax on imported cotton yarn under the FY26 budget aims to bolster local yarn manufacturers, but the exemption of other critical raw materials like cotton from sales tax and GST remains a concern for domestic producers.

Sources:

  • Taurus Securities, "Pakistan textile exports: Mixed response in May 2025" (no date provided)
  • Pakistan government's FY26 budget documents (no date provided)