Pakistan’s Textile Industry: A Rising Giant Amid Challenges and Opportunities
Over the past five years, Pakistan’s textile industry has shown remarkable growth and resilience, becoming a vital part of the country’s economy. The sector contributes around 8.5% to Pakistan’s GDP and employs nearly 45% of the industrial workforce, making it one of the largest manufacturing industries in the nation. It plays a key role in exports, with textile and apparel shipments reaching over $17 billion in 2024, marking an 8.6% recovery from the previous year and nearing pre-crisis levels10.
The industry’s strength lies in its diverse capabilities—from cotton production and spinning to manufacturing finished products like readymade garments, knitwear, bedwear, and towels. Pakistan ranks among the top textile exporters in Asia, benefiting from a complete value chain and a skilled workforce. The government’s Textile Policy 2020-25 aims to boost exports further, targeting $25 billion by 2025 and $50 billion by 2030, focusing on higher value-added products and modernizing facilities68.
Despite these achievements, the sector faces challenges. A recent government export scheme, the Export Facilitation Scheme, has unintentionally hurt local producers by allowing imported raw materials to enter tax-free while taxing locally produced inputs at 18%. This has led to the closure of over 900 textile factories, including ginning and spinning mills, causing job losses and operational difficulties[Search content]. Industry leaders have called for urgent policy revisions to protect domestic production and ensure sustainable growth.
Nevertheless, the textile industry’s future remains bright. The global demand for clothing and lifestyle products is expected to grow steadily, and Pakistan’s competitive advantages—such as abundant cotton supply, improving energy availability, and government incentives—position it well to capitalize on this trend. Local brands are expanding internationally, and major global apparel companies continue to source from Pakistan, highlighting the sector’s export potential7.
In summary, Pakistan’s textile industry has experienced a significant boom in recent years, contributing strongly to the economy and employment. While policy challenges remain, ongoing reforms and market opportunities promise a vibrant future for this cornerstone of Pakistan’s industrial landscape.
