In the first half of fiscal year 2024-25 (1HFY25), Pakistan textile and clothing exports showed impressive growth, rising by 9.67%. Despite facing challenges from regional competition and internal issues like high taxation, the sector performed well due to increased demand, particularly from Bangladesh’s supply disruptions. Here is an overview of this performance and the key factors influencing it.
Overview of Textile Exports Growth
The textile sector in Pakistan maintained positive momentum, achieving a growth rate of 9.67% in exports. These exports reached $9.08 billion in the first half of FY25, up from $8.28 billion in the same period last year.
| Period | Export Growth (%) |
|---|---|
| July | -3.09% |
| August | 13.00% |
| September | 17.92% |
| October | 13.11% |
| November | 10.81% |
| December | 5.55% |
Reasons Behind Growth
Several factors contributed to the growth in textile exports, including the disruption in Bangladesh’s supply chain, which led to a higher demand for Pakistani garments. However, experts believe that despite this growth, the sector will need to work hard to stay competitive, especially with the introduction of harsh taxation policies for the current fiscal year.
Key Segments Contributing to Textile Export Growth
Within the textile sector, some categories performed better than others. Here are the key segments showing growth in terms of value and quantity:
| Product | Growth in Value (%) | Growth in Quantity (%) |
|---|---|---|
| Readymade Garments | 22.48% | 10.00% |
| Knitwear | 18.42% | 8.87% |
| Bedwear | 14.75% | 14.27% |
| Towels | 5.97% | 5.65% |
| Cotton Cloth | 4.10% | -1.70% |
While some segments like yarn and raw cotton saw a decline, others such as readymade garments, knitwear, and bedwear saw significant increases.
Challenges Faced by the Textile Sector
Despite the growth in exports, Pakistan’s textile sector faces a variety of challenges. Structural issues, particularly in efficiency and production processes, continue to hamper progress. High taxation, including an increase in tax rates on exporters’ income for FY25, adds additional pressure on textile producers.
| Challenges | Impact |
|---|---|
| High Taxation | Increased cost for exporters |
| Supply Chain Disruptions | Increased demand from neighboring countries like Bangladesh |
| Structural Issues | Reduced competitiveness in the region |
Performance of Specific Categories
Some categories performed exceptionally well, while others faced significant declines. Here is a breakdown of the performance in different textile categories:
| Category | Growth in Value (%) | Growth in Quantity (%) |
|---|---|---|
| Yarn | -37.96% | – |
| Made-up Articles (Excluding Towels) | 9.36% | – |
| Tents, Canvas & Tarpaulin | 9.55% | – |
| Raw Cotton | -98.85% | – |
While yarn and raw cotton exports experienced steep declines, other categories like made-up articles and tents saw healthy growth. This highlights the varying performance across different product lines in the textile sector.
Imports Impacting the Textile Industry
While exports showed strong growth, imports of certain textile-related goods also saw significant changes. The import of raw cotton surged by 154.93%, and the import of textile machinery rose by 53.90%. Meanwhile, imports of synthetic fibre and synthetic silk yarn had mixed results.
| Product | Growth (%) |
|---|---|
| Raw Cotton | 154.93% |
| Textile Machinery | 53.90% |
| Synthetic Fibre | -3.67% |
| Synthetic Silk Yarn | 9.86% |
The increase in imports, especially raw cotton, is a sign of greater demand for materials to meet the growing demand in textile production.
Summary
The textile sector in Pakistan has shown strong growth in the first half of FY25, with a 9.67% increase in exports. This growth is primarily driven by increased demand and higher performance in key categories like readymade garments and knitwear. However, challenges such as high taxation and competition from neighboring countries remain, and the government must address these issues to maintain the momentum. With appropriate strategies, Pakistan’s textile sector can continue to thrive and contribute significantly to the economy.
