Pakistan’s textile and apparel exports remained broadly stable at around $18 billion in FY26 despite a sharp contraction in the country’s overall exports, but a continuing decline in domestic cotton production is emerging as a major structural risk to the export sector, according to the Pakistan Textile Council (PTC).
The PTC’s annual export performance report for FY26 showed textile and apparel exports at $18.004 billion, up just 0.3% from $17.95 billion a year earlier, even as Pakistan’s overall exports fell 5.9% to $30.14 billion.
The report, however, highlights a widening weakness at the raw-material end of the textile chain. Domestic cotton production has fallen to just 5.5 million bales in the latest season — the lowest level in three decades — compared with a peak of 14.8 million bales in 2011-12, representing a decline of nearly 70%.
The PTC attributed the latest deterioration to heat stress during the June-July flowering period and acute water shortages in Sindh and southern Punjab. The growing shortfall in domestic cotton is increasingly being met through external supplies, raising concerns over the competitiveness and resilience of the country’s export-oriented textile industry.
The implications are already visible in the export composition. Exports of raw materials and intermediate textile products covered by Chapters 50-60 declined 3.4% to $3.026 billion in FY26, the lowest level in five years, from $4.498 billion in FY22.
Cotton itself accounted for more than 80% of raw-material and intermediate exports, but its exports declined 1.5% to $2.486 billion. Man-made staple fibres fell 8.8%, while man-made filaments and knitted fabrics declined 26.2% and 20.7%, respectively.
At the same time, the industry is becoming increasingly dependent on value-added products. Exports under Chapters 61-63 rose 1.1% to $14.979 billion and now account for 83.2% of total textile exports, compared with 77% in FY22.
Non-knit apparel was the strongest performer, with exports rising 3.9% to $4.295 billion, while made-up textile articles increased 0.6% to $5.705 billion. Knitwear exports, however, slipped 0.7% to $4.979 billion.
The report suggests that the relative resilience of value-added exports is masking weaknesses deeper in the textile supply chain. With the domestic cotton base continuing to shrink, Pakistan faces the dual challenge of securing sufficient raw material while maintaining cost competitiveness in international markets.
The United States remained the largest individual growth market, with textile exports rising to $4.853 billion from $4.768 billion, while exports to China increased to $644 million from $527 million. The European Union remained the largest market at $7.103 billion, although exports declined from $7.248 billion. UK-bound exports also fell slightly to $1.730 billion from $1.749 billion.
The report also points to a significant deterioration in export logistics, with longer transit times, higher freight costs, expensive energy, a high cost of capital and taxation pressures adding to the industry’s difficulties.
The weakness became particularly visible towards the end of FY26. Textile and apparel exports fell 17% year-on-year to $1.27 billion in June 2026 from $1.53 billion and declined 23% from May’s $1.65 billion.
The PTC has called for a national cotton strategy focusing on seed quality, farmer digitisation and traceability, alongside measures to reduce energy and financing costs, expedite tax refunds and improve export logistics.
The report cautions that the textile sector enters FY27 with structural headwinds, including a declining domestic cotton base. For an economy in which textiles account for roughly 60% of total merchandise exports, the continued erosion of the domestic cotton supply could increasingly affect both the cost structure and long-term growth potential of Pakistan’s export sector.
