Moaaz Manzoor

Pakistan’s textile and apparel sector showed strength in value-added categories during the July-August period of the fiscal year 2025-26 (FY26). However, overall exports recorded mixed trends and traditional segments continued to face persistent pressure, according to the latest report from the Pakistan Textile Council (PTC), available with Wealth Pakistan.

Overall exports during the period stood at $5.1 billion, edging up 0.65% from $5.07 billion in the same period last year. Textiles and apparel remained the mainstay, contributing $3.21 billion during July-August FY26, up 10% from $2.93 billion in FY25 and making up nearly 63% of total exports.

The monthly trend was softer. August 2025 exports fell to $2.42 billion, down 12.5% year-on-year and 10% month-on-month. Textile and apparel shipments slipped to $1.53 billion, registering a 7% decline from August 2024 and 9% from July 2025.

Despite this, value-added categories (chapters 61-63) showed resilience. Knitwear rose 16.8% to $959 million, non-knit apparel grew 10.5% to $728 million, and other made-up articles increased 10.4% to $1 billion, now the largest sub-category. Together, these reached $2.69 billion in July-August FY26, marking a 13% year-on-year rise and providing the backbone of overall export growth.

Traditional textiles (chapters 50-60) told a different story. Exports fell 3% to $523 million in July-August FY26. In August alone, exports slipped to $273 million, down 7% year-on-year, though slightly higher month-on-month. This segment has shrunk steadily over five years, from $685 million in FY22 to $523 million in FY26.

While man-made staple fibers (+9.5%), special woven fabrics (+19.3%), and coated fabrics (+26.9%) gained ground, declines in cotton (-3.5%), man-made filaments (-14.2%), carpets (-21.5%), and knitted fabrics (-32.7%) weighed on the overall balance.

On the destinations side, the European Union remained the largest textile market at $1.3 billion, followed by the United States ($878 million), the UK ($309 million), Bangladesh ($121 million), and the UAE ($101 million).

Risks could weigh on momentum. JS Global’s head of research, Muhammad Waqas Ghani, in his report “Floods 2025 – climate crisis hits Pakistan again”, warned that torrential rains have damaged cotton crops, raising the possibility of shortages, higher imports, and up to $0.5 billion in lost exports. Rice and other agricultural exports also face risks, with potential spillover effects on the current account.

The Pakistan Textile Council cautioned that high energy tariffs, rising wage costs, and compliance standards stricter than those of regional competitors erode competitiveness. It urged incentives for value-added exports, investment in spinning and cotton revival, and a predictable tax and energy regime.

Credit: INP-WealthPk