ISLAMABAD: Pakistan’s textile and apparel exports presented a mixed picture in the first two months of FY26, with steady growth in the European market offset by stagnation in the United States, modest gains in the United Kingdom, and volatility in smaller destinations such as the UAE and Bangladesh.
The Pakistan Textile Council’s latest report, released on Saturday, underscored the industry’s heavy reliance on European buyers and its vulnerability to fluctuations in a limited circle of markets.
During July–August FY26, the European Union (EU-27) retained its dominant position as Pakistan’s top textile destination, with shipments rising to $1.303 billion from $1.149bn a year earlier. The United States, however, remained flat at $878m, a trend largely unchanged over the past five years.
Exports to the UK showed a steady increase, reaching $309m in 2MFY26 from $288m in the same period of FY22 — a rise of 7.3pc. Shipments to Bangladesh stood at $121m, slightly below the $129m peak in 2MFY22, while the UAE market more than doubled over the five-year period, climbing to $101m in 2MFY26 from just $50m in 2MFY22.
Bangladesh’s imports are dominated by raw materials such as yarn and fabric, while UAE orders oscillate between apparel and textiles, reflecting volatility in smaller markets.
Over a five-year horizon, exports to the US peaked at $894m in 2MFY22 before easing slightly to $878m in FY26. UK exports, by contrast, trended consistently upward, with FY26 marking the highest level at $309m. Exports to Bangladesh declined between FY22 and FY24 before recovering modestly in FY25 and FY26.
The report highlighted diverging fortunes between traditional and value-added segments. Traditional textiles such as cotton yarn and fabrics showed a persistent decline, falling from $685m in 2MFY22 to $523m in 2MFY26. A modest 9pc month-on-month recovery was recorded in August 2025 compared to July, but the long-term trend remains downward.
Value-added exports, in contrast, rose strongly from $2.28bn in 2MFY22 to $2.69bn in 2MFY26, a gain of 17.9pc. Knitwear expanded by 16.8pc, non-knit apparel by 10.5pc, and other made-up articles by 10.4pc, collectively lifting the value-added segment by 12.6pc.
However, August 2025 performance flagged, with exports falling to $1.25bn — down 7pc year-on-year from $1.35bn in August 2024 and 13pc month-on-month from $1.43bn in July 2025.
Challenges and outlook
The report stressed that Pakistan’s textile sector has the capacity to grow at a much faster pace but remains constrained by uncompetitive energy tariffs and wage structures compared with regional rivals.
It called for urgent policy measures including regionally competitive energy and wage policies, rationalisation of tax rates, affordable financing to meet compliance costs, and support for diversification and innovation.
Published in Brackly News, September 14th, 2025
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