Pakistan textile exports up 5.63% in Q1 FY26 on strong demand

The textile and apparel sector of Pakistan showed a bright patch in the first quarter (July–September) of fiscal year 2025-26 (FY26), as exports rose by an estimated 5.63 % year-on-year to around US $4.77 billion. LinkedIn+3english.news.cn+3china.org.cn+3

What is driving the growth?

Several factors have combined to boost textile export performance:

• Stronger global demand for value-added textile and apparel goods, especially knitwear and man-made fibre (MMF) products, has helped Pakistan capture favourable orders. inp.net.pk

• Improvement in cotton output and investment in machinery have bolstered production capacity and processing capability, enabling exporters to service global demand more efficiently.

• The sector’s shift towards more value-added segments (e.g., knitwear rather than raw textiles) is helping mitigate headwinds in more traditional categories.

Mixed performance within textile categories

While overall exports were up, not all segments fared equally:

• Knitwear and man-made fibre (MMF) textile products led the growth, reflecting strong demand in global apparel markets.

• Conversely, cotton fabric exports saw a decline, largely due to weak demand in Asian markets, which traditionally import cotton fabrics from Pakistan.

Sectoral importance and broader context

The textile and apparel sector remains a cornerstone of Pakistan’s export economy:

• The sector accounted for approximately 63 % of Pakistan’s total exports during Q1 FY26, underscoring its dominant role. inp.net.pk

• Given this heavy reliance, even modest changes in textile performance have outsized implications for Pakistan’s overall trade and foreign exchange dynamics.

Challenges & caveats

Despite the positive headline, some factors warn caution:

• The overall export earnings of Pakistan dropped by around 3–4% in Q1 FY26, to ~US $7.6 billion. Profit by Pakistan Today+1

• The rise in textile exports masks uneven performance: traditional and cotton-based categories are vulnerable to global demand shifts and regional competition.

• Pakistan still faces structural challenges—energy costs, currency pressures, logistics—that could hamper sustained export growth.

• Global supply-chain volatility, rising cost of inputs (including cotton and utilities) and shifting trade patterns all pose risks.

What this means going forward

For stakeholders in the textile and apparel export ecosystem in Pakistan, these trends imply:

• A need to accelerate value‐addition: moving further up the textile value chain (finished garments, branding, design) rather than relying purely on basic fabrics.

• Greater emphasis on diversification of markets: relying too heavily on traditional buyers or regions may leave the sector vulnerable to demand slowdowns.

• Investment in modern machinery and supply-chain efficiency becomes increasingly vital to maintain competitiveness.

• The government and industry bodies should collaborate on policy support, including energy pricing, export financing, and currency stability, to sustain growth.

Conclusion

The 5.63 % growth in textile and apparel exports in Q1 FY26 signals that Pakistan’s textile industry is navigating the headwinds reasonably well, thanks to stronger global demand and a shift towards higher-value products. Yet, the path ahead is not without challenges. With exports still heavily reliant on the textile sector and overall export earnings under strain, Pakistan must invest in upgrading its textile value chain, diversify its markets, and address structural constraints to translate this positive streak into sustainable growth.