Brokerage house Topline Securities reported that knitted apparel exports alone touched an all-time high of $485 million, underscoring the strength of Pakistan’s value-added segment. The textile sector accounted for nearly 60% of the country’s total goods exports during the month, which reaffirmed its role as the backbone of Pakistan’s export economy.
The latest surge comes amid a gradual post-pandemic recovery, stronger trade linkages, and a relatively stable exchange rate. Yet, industry experts warn that persistent challenges such as high energy costs, expensive financing and cotton supply disruptions continue to weigh on long-term competitiveness.
A recent report of Taurus Securities projected that profitability across Pakistan’s listed textile companies would rise by nearly 3.1 times year-on-year in the first quarter of FY26, supported by higher export volumes, lower borrowing costs, and Pakistan’s competitive edge following US tariffs on regional peers.
The brokerage said margins were likely to expand by 11 percentage points year-on-year, citing cost control measures, renewable energy adoption, and a stable rupee-dollar parity. Taurus noted that textile exports rose 6% year-on-year in 1QFY26, aided by a 56% jump in local cotton production.
Among major players, Gul Ahmed Textile Mills is expected to post a profit after tax of Rs2.4 billion, up 6% from last year; Nishat Mills is projected to earn Rs1.3 billion, up 41%; and Interloop Limited is expected to record a tenfold increase in quarterly profit to Rs2.5 billion, driven by strong apparel and denim sales.
A senior industry representative told The Express Tribune that while Pakistan’s textile exports have regained momentum, the sector faces multiple structural headwinds. “The textile industry, one of Pakistan’s strongest export pillars, is grappling with challenges such as yarn shortages due to damage to the cotton crop caused by recent rains. Many manufacturers are now forced to import yarn, which increases costs because of dollar payments,” he explained.
He added that the government’s recent imposition of duties on imported accessories, such as buttons and zippers used in export-oriented goods, has further raised production costs. These duties push up exporters’ expenses at a time when they are already struggling to remain competitive globally, he noted.
High borrowing costs remain another obstacle, with Pakistan’s policy rate at 11%, among the highest in the region. Coupled with expensive electricity, these factors continue to erode cost competitiveness compared to countries like Bangladesh and Vietnam.
Despite these pressures, exporters of bed linen, towels, and home textiles continue to expand their global footprint, participating in major European exhibitions to secure new orders.
Meanwhile, hosiery and knitwear manufacturers, already operating at full capacity, have avoided additional commitments, indicating strong demand but limited expansion capability.
Omer Salahuddin, a representative of Messe Frankfurt for Pakistan, Bangladesh, Sri Lanka, Bhutan, and the Maldives, stressed that Pakistani exporters should attend exhibitions such as Heimtextil, Techtextil, Texprocess, and Texworld as they offer a comprehensive network for the entire textile value chain — from fibres and fabrics to finished and technical textiles.
“These platforms bring together tens of thousands of international buyers, manufacturers, and innovators each year, offering Pakistani companies unmatched exposure to global markets and trends in sustainability, design, and technology,” he said.
“Pakistan’s textile sector is dynamic and evolving rapidly. Through global trade fairs and the right platforms, Pakistani manufacturers must connect with international buyers and stay ahead of emerging trends in design, innovation, and sustainability,” the Messe Frankfurt representative added.