The Pakistan Textile Council (PTC) reports a clear structural divergence within Pakistan’s textile and apparel export basket during 1H FY26: value-added products are growing, while traditional yarn and fabric exports continue to contract.
Key performance snapshot (1H FY26)
- Value-added textiles (HS 61–63): USD 7.70bn, +3% YoY
- Knitwear: +4.1%
- Non-knit apparel: +4.9%
- Made-ups: +1.3%
- Total textile exports: USD 9.19bn, +1% YoY
- Share of Pakistan’s total exports: ~61%
- December 2025: Exports -9% YoY, -5% MoM, signaling short-term volatility
Upstream stress intensifies
Traditional textile exports (HS 50–60: yarns & fabrics) fell from USD 1.65bn (Jul–Dec FY25) to USD 1.49bn (Jul–Dec FY26), reflecting:
- High cost of doing business
- Uncompetitive energy tariffs
- Tax frictions and financing constraints
Markets: dependence remains high
- EU: USD 3.67bn (largest market; growth continues)
- United States: USD 2.47bn (broadly stable over five years)
- United Kingdom: USD 892m (slight easing)
- UAE: USD 324m (five-year high; steady growth)
- Bangladesh: USD 311m
PTC flags concentration risk, with the EU remaining the anchor market and limited diversification elsewhere.
Policy agenda proposed by PTC
To sustain value-added momentum and arrest upstream decline, PTC recommends:
- Regionally competitive, predictable energy pricing for exporters
- Wage and overtime alignment with peers (Bangladesh, Vietnam)
- Tax reduction & zero-rating of inputs under the Export Facilitation Scheme
- Time-bound export rebates for HS 61–63 linked to value addition, SDGs & ESG
- Cotton reforms to improve quality, yields, and lower costs (HS 50–60)
- Stronger trade finance: EXIM Bank, higher EFS & LTFF limits
- Financing for innovation, renewables & green projects
- A five-year textile & apparel policy with legal cover and KPI-based monthly monitoring
Industry view
PTC Chairman Fawad Anwar said the data underline where Pakistan’s competitiveness now lies:
“Value addition—not raw or semi-processed textiles—is driving resilience. Without predictable energy, competitive labour frameworks and a peer-level tax regime, upstream segments will remain under stress.”
Bottom line: Pakistan’s export engine is shifting decisively toward value-added apparel and made-ups. Locking in this advantage—and preventing further erosion upstream—will depend on fast, coordinated policy action to lower structural costs and support scale, compliance, and diversification.
