Pakistan’s textile sector, the country’s largest source of US dollar earnings, is facing increasing pressure as industry leaders call for urgent government intervention to safeguard exports and maintain global competitiveness. Rising production costs, limited access to financing, and a growing shortage of cotton have emerged as major concerns for manufacturers and exporters.
In a letter addressed to Prime Minister Shehbaz Sharif, the Pakistan Textile Council (PTC) urged the government to introduce immediate policy reforms to support the industry. The council warned that without timely action, the sector could struggle to sustain export growth and retain its position in international markets.
According to the PTC, Pakistan’s textile and apparel exports remained largely stagnant during the fiscal year 2025-26. Export earnings increased by only 0.26 percent, reaching $17.93 billion compared with $17.88 billion in the previous fiscal year. The marginal growth reflects the mounting challenges confronting one of Pakistan’s most important export industries.
The council also pointed to a significant decline in export performance during June 2026. Textile exports fell by 17 percent year-on-year and 23 percent compared with May, dropping to their lowest monthly level in 14 months. The slowdown has raised concerns about weakening international demand and the industry’s ability to compete amid rising operational costs.
Textiles account for the largest share of Pakistan’s export revenue and are a major contributor to employment, industrial output, and foreign exchange earnings. As a result, prolonged weakness in the sector could have broader implications for the country’s economy and external account.
Industry representatives argue that rising electricity and gas costs have significantly increased manufacturing expenses, making Pakistani products less competitive in key export destinations. They also highlighted financing constraints, which have limited businesses’ ability to invest in expansion, modernize production facilities, and manage working capital.
Another critical issue raised by the PTC is the worsening cotton shortage. Cotton remains the primary raw material for Pakistan’s textile industry, and reduced domestic production has forced manufacturers to rely more heavily on imported cotton. This increases production costs and exposes exporters to international price fluctuations and exchange rate risks.
The textile industry has urged the government to implement policies that improve access to affordable financing, ensure a stable supply of energy at competitive rates, and strengthen domestic cotton production. Industry leaders believe these measures are essential to restoring export momentum and supporting long-term growth.
Economists note that a stronger textile sector is vital for improving Pakistan’s trade balance and boosting foreign exchange reserves. Since textiles generate the largest share of export income, any slowdown directly affects the country’s external sector and overall economic stability.
As policymakers evaluate the industry’s recommendations, investors and exporters will be closely monitoring upcoming policy decisions. The effectiveness of government support, global demand trends, and improvements in domestic production conditions will play a key role in determining whether Pakistan’s textile sector can regain stronger export growth in the months ahead.
