ISLAMABAD: Pakistan’s textile exports recorded a 2% year-on-year decline to $1.53 billion in May 2025 as the industry struggles with severe cotton shortages and growing international trade challenges.
The drop comes despite marginal monthly improvements, exposing deep structural problems in the nation’s most critical export sector that employs 40% of Pakistan’s industrial workforce and contributes over 60% to total export earnings.
Domestic Cotton Shortage Bites Hard
Pakistan’s textile mills face an unprecedented raw material crisis as domestic cotton production meets less than half of industry requirements.
The country that once ranked as Asia’s third-largest cotton producer has seen its crop shrink dramatically due to climate change impacts, pest infestations, and farmers switching to more profitable crops like sugarcane.
Textile manufacturers have been compelled to import over $1.5 billion worth of cotton this fiscal year, significantly increasing production costs and making Pakistani goods less competitive in global markets.
Global Headwinds Intensify Pressure
The sector faces mounting challenges in international markets including stricter trade compliance requirements and growing competition from regional rivals.
New US legislation on labor standards has created additional barriers for Pakistani textile exporters who traditionally relied on American and European markets.
Bangladesh and Vietnam continue to gain market share through better pricing and more consistent quality standards, leaving Pakistan struggling to maintain its position.
The government’s recently announced Textile Policy 2025-30 promises long-term solutions but offers little immediate relief to mills facing raw material shortages.
Industry leaders warn that without urgent measures to revive cotton farming, Pakistan risks permanent damage to its textile export capacity.
The Ministry of Commerce points to upcoming free trade agreements with Gulf nations as potential growth drivers, but economists emphasize that fundamental supply chain issues must be addressed first.
With textile exports crucial for Pakistan’s foreign exchange reserves and economic stability, the current crisis demands immediate policy intervention to support both farmers and manufacturers.
Experts recommend emergency measures including subsidized high-yield seeds, modern irrigation systems, and guaranteed cotton prices to encourage farmers to return to the crop before the next planting season begins.
The situation remains critical for Pakistan’s economy as textile exports account for the largest share of the country’s industrial output and provide livelihoods for millions of workers across the value chain.
