Pakistan's Textile Exports Hold at $18 Billion in FY26 Despite Cotton Crisis

Pakistan's textile and apparel sector closed fiscal year 2025-26 with $18 billion in exports, according to a Pakistan Textile Council report — a modest 0.3% increase over the $17.95 billion recorded the year before. The sector remains, by a wide margin, Pakistan's largest single export earner, accounting for roughly 60% of the country's total exports for the year.

A strong finish masking a weak year

The headline annual figure understates how uneven FY26 actually was. Textile exports surged 43% month-over-month to $1.81 billion in July 2026 — the opening month of the new fiscal year — up from $1.27 billion in June and 8% higher than July 2025's total. Within that July surge, knitwear led the way (up 46.6% month-over-month to $533.84 million), followed by readymade garments (up 45.9% to $459.99 million) and bedwear (up 47.1% to $308.50 million). That's a sharp acceleration relative to the broader FY26 trend, where full-year growth landed near flat.

The cotton problem underneath the numbers

Pakistan's domestic cotton crop — a core raw-material input for the textile sector — fell to 5.5 million bales in the latest season, the lowest production level in thirty years. That shortfall forces mills to rely more heavily on imported cotton, which raises input costs and squeezes margins even when export revenue itself holds steady or grows. It's a structural vulnerability sitting underneath an export sector that otherwise looks resilient on paper.

Why textiles matter beyond the trade balance

Because textiles represent such a large share of Pakistan's total exports, the sector's performance has an outsized effect on the country's foreign-exchange earnings and, by extension, its ability to manage the kind of balance-of-payments pressure covered in our remittances, reserves, and rupee explainer. A textile sector that's flat on exports but facing a cotton-driven cost squeeze is a more fragile position than the headline $18 billion figure alone suggests.

What to watch next

Whether the July 2026 growth spurt represents the start of a genuine turnaround or a one-month anomaly will become clearer as more of fiscal year 2026-27's monthly data comes in — particularly whether knitwear and garment exports can sustain their growth rate while cotton input costs remain elevated.

Build Better Pakistan's Economy Desk tracks Pakistan's export performance as part of our ongoing economic coverage.