Pakistan’s textile exports stayed on a growth path through FY2025, but the pace has slowed in FY2026. The sector remains the backbone of the country’s export economy, yet the latest official data shows a more mixed picture than the strong rebound seen in late 2024. In July-January FY2026, the textile group earned $10.90 billion, only 1.25% higher than the same period a year earlier, while its share in total exports still stood near 60%.
FY2025 Ended on a Stronger Note
The recovery that began in 2024 did continue through most of FY2025. Pakistan Economic Survey 2024-25 said textile exports during July-April FY2025 rose 8.4% to $14.8 billion, up from $13.7 billion in the same period of the previous year. The strongest gains came from value-added categories. Ready-made garments rose 17.5% in value, knitwear 15.5%, and bedwear 12.2%.
The Ministry of Commerce later said the broader textiles and apparel sector posted 7.4% growth in FY2024-25. The same official yearbook described the sector as contributing around 56% of Pakistan’s total exports, 40% of industrial employment, and 24% of value addition, showing how central textiles remain to the economy.
FY2026 Growth Has Slowed
The more recent data shows that export growth has not collapsed, but it has lost momentum. The State of Pakistan’s Economy half-year report said textile exports reached $8.6 billion in July-December FY2026, up 5.2% from $8.2 billion a year earlier. But the more current Ministry of Commerce statement for July-January FY2026 shows growth slowing to only 1.25% year-on-year.
That cooling is even clearer in the product mix. Official January 2026 trade data shows cotton cloth exports at $992.18 million, down 12.18%, and cotton yarn at $426.87 million, down 0.78% in July-January FY2026. This points to continued weakness in upstream and intermediate segments.
Value-Added Products Still Lead
The strongest support is still coming from higher-value items. In July-January FY2026, knitwear exports reached $3.10 billion, up 2.14%. Readymade garments rose to $2.58 billion, up 5.66%, while bedwear reached $1.92 billion, up 2.71%. Made-up articles also edged higher.
This pattern matches the longer FY2025 trend. Pakistan is performing better where value addition is stronger, while yarn and cloth remain under greater pressure from cost issues, competition, and shifting global demand.
New Policy Changes Matter
Policy has also moved since the original article was published. During FY2024-25, the Ministry of Commerce revised the Export Facilitation Scheme to improve transparency, predictability, and compliance. It also circulated the first draft of Textiles and Apparel Policy 2025-30, created an advisory council on sustainability and circularity, and pushed traceability measures such as a planned DNA testing laboratory for the cotton value chain.
In July 2025, the government launched National Tariff Policy 2025-30. The policy aims to support export-led growth through tariff rationalization, duty-free access to imported raw materials, elimination of ACDs in four years, elimination of RDs in five years, and a simpler tariff structure.
Pakistan also moved to protect market access in the United States. After official consultations with exporters in April 2025, the government announced a trade deal with the US in July 2025, and in August 2025 said the reciprocal tariff on Pakistani exports had been reduced from 29% to 19%. That matters because the US remains Pakistan’s largest single export market.
Outlook for the Sector
Pakistan’s textile sector remains resilient, but the story is no longer one of uninterrupted acceleration. FY2025 delivered a clear recovery, while FY2026 has brought slower growth and continued stress in upstream segments. The sector’s next phase will depend on whether tariff reform, export facilitation, sustainability compliance, and stronger access to major markets can translate into faster gains in value-added exports.