Islamabad: Pakistan’s export sector has shown promising growth in the first month of the current fiscal year 2025–26 (July 2025), with overall exports increasing by 16.43% compared to the same period last year. According to the Federal Bureau of Statistics (FBS), total exports during July stood at $2.68 billion, marking a significant boost for the country’s external sector amid global economic challenges.
This surge, driven largely by the textile industry, offers optimism for policymakers aiming to stabilize Pakistan’s economy through increased foreign exchange earnings. However, the data also highlights sector-specific challenges, particularly in food commodities, petroleum, and industrial goods.
Textile Exports Drive Overall Growth
The textile sector, considered the backbone of Pakistan’s export economy, once again led the way in July 2025.
- Textile exports grew by 32%, reaching $1.67 billion in value.
- Sub-sectors such as ready-made garments, cotton yarn, fabrics, knitwear, bedwear, and towels recorded substantial increases.
- However, exports of tents, canvas, and tarpaulins witnessed a decline.
Pakistan’s textile industry benefits from a large cotton production base, skilled labor force, and competitive costs, making it one of the most crucial foreign exchange earners. The recent jump is attributed to:
- Increased demand from Europe and North America.
- Currency depreciation making exports more competitive.
- Government-backed incentives for textile exporters, such as reduced energy tariffs and tax relief.
This performance reaffirms textiles as the flagship sector of Pakistan’s export economy, contributing more than 60% of the total export revenue.
Food Exports: A Mixed Picture
While overall exports rose, the food export sector showed a decline of 10.25%, recording $426.9 million compared to $475.7 million in July last year.
Declining Items:
- Basmati rice – traditionally one of Pakistan’s strongest agricultural exports, saw reduced shipments due to weaker demand and pricing pressures in international markets.
- Vegetables and oilseeds – exports decreased as domestic supply shortages limited exportable surplus.
- Sugar – exports dropped due to both international competition and higher local consumption needs.
Items with Positive Growth:
- Fruits and spices – Pakistan’s mangoes, kinnow, and other seasonal fruits enjoyed strong demand in Middle Eastern and Asian markets.
- Meat and meat products – exports surged as Pakistan tapped into Gulf states and Central Asian markets with halal-certified products.
The contrasting performance within food exports highlights the need for diversification, improved agricultural practices, and better supply chain management to stabilize earnings from this sector.
Industrial and Manufactured Goods: Mixed Trends
Beyond textiles and food, Pakistan’s industrial and manufactured goods sector showed both growth and decline depending on the product category.
Positive Performers:
- Leather products – benefitted from increased demand for finished goods like jackets, footwear, and accessories.
- Surgical instruments – continued to perform well due to Pakistan’s global reputation as a producer of quality surgical and medical equipment.
- Auto parts – recorded growth, reflecting Pakistan’s expanding role in the regional auto supply chain.
Declining Sectors:
- Plastic materials – exports slowed due to reduced orders from international markets.
- Pharmaceuticals – recorded lower sales, attributed to stiff competition from India and China.
- Transport equipment – demand declined, reflecting global shipping slowdowns and reduced automobile imports in target countries.
This uneven trend underscores the opportunities and vulnerabilities facing Pakistan’s manufacturing sector, which requires investment in technology, research, and branding to remain competitive.
Petroleum and Coal Exports Fall Sharply
A significant decline was recorded in the petroleum and coal export category.
- Exports dropped by 23.37%, settling at $48.8 million.
- This fall is linked to lower international demand, declining prices, and reduced production capacities within Pakistan.
Similarly, exports from specific industries declined by 17.35% on an annual basis, showing that while certain areas are thriving, others remain under stress.
Key Reasons Behind Export Growth and Decline
Pakistan’s July 2025 export data highlights several underlying factors shaping performance across different sectors:
- Global Demand Recovery – Major economies, particularly in Europe and the US, showed signs of recovery, leading to higher demand for textiles and manufactured goods.
- Currency Depreciation – The Pakistani rupee’s depreciation against the dollar made exports more competitive, boosting textile and leather sales abroad.
- Government Policies – Export incentives, energy subsidies for textile industries, and trade facilitation measures supported growth.
- Agricultural Constraints – Shortages of water, high input costs (fertilizers, pesticides), and weak supply chains negatively impacted food commodity exports.
- Energy and Industrial Bottlenecks – High energy costs and limited access to raw materials hindered industries like plastics, transport equipment, and petroleum refining.
Regional and Global Trade Dynamics
Pakistan’s export growth in July must also be understood in the context of global trade dynamics:
- South Asia Competition – Pakistan faces stiff competition from India, Bangladesh, and Vietnam in textiles and garments.
- Middle Eastern Markets – Meat, fruits, and spices from Pakistan continue to find strong demand in Saudi Arabia, UAE, and Qatar.
- European Union (EU) – Pakistan’s GSP+ status (Generalized Scheme of Preferences) remains crucial in keeping its textiles competitive in European markets.
- China and Central Asia – Growing opportunities exist under the China-Pakistan Economic Corridor (CPEC) framework to expand export destinations.
Challenges Ahead for Pakistan’s Export Sector
Despite the encouraging growth, Pakistan faces multiple structural challenges that could limit sustained export expansion:
- Energy Crisis – Frequent power outages and high gas tariffs increase production costs.
- Logistics and Infrastructure – Port inefficiencies, outdated transport systems, and customs delays hinder timely deliveries.
- Dependence on Few Sectors – Heavy reliance on textiles (over 60% of exports) exposes Pakistan to risks if demand fluctuates.
- Limited Product Diversification – High-potential sectors like IT services, engineering goods, and pharmaceuticals remain underdeveloped.
- Agricultural Vulnerabilities – Climate change, water shortages, and lack of modernization affect food export reliability.
Government’s Response and Future Strategy
The Pakistani government has repeatedly emphasized the need to boost exports as a cornerstone of economic recovery. Officials are focusing on:
- Expanding textile capacity through new industrial zones and modern machinery imports.
- Encouraging IT and digital services exports, which are less affected by global supply chain disruptions.
- Promoting agricultural modernization, with an emphasis on high-value crops, modern storage, and cold-chain facilities.
- Trade diversification, targeting African, Central Asian, and Latin American markets beyond traditional destinations.
If effectively implemented, these measures could help Pakistan not only sustain but accelerate export growth in the coming months.
Expert Opinions on July’s Export Data
Economists and trade analysts have welcomed the 16.43% growth but warn against over-reliance on textiles alone.
- Dr. Salman Shah, former finance minister, commented that Pakistan needs to develop a balanced export basket, including IT services, engineering, and pharmaceuticals.
- Industry experts noted that while textiles are performing well, agriculture exports require urgent reforms to ensure consistency.
- Chambers of Commerce have urged the government to address energy and infrastructure bottlenecks to support industrial competitiveness.
Conclusion: A Positive Start with Room for Improvement
The July 2025 export figures offer a promising start to the fiscal year 2025–26, with $2.68 billion in total exports marking a 16.43% increase over last year. The robust growth in textiles, leather, surgical goods, and certain food categories shows Pakistan’s resilience in a competitive global trade environment.
However, the decline in basmati rice, sugar, petroleum, and specific industrial exports highlights underlying weaknesses that need urgent attention. For Pakistan to maintain sustainable export growth, it must:
- Diversify its export portfolio.
- Modernize agriculture and industry.
- Expand into new markets.
- Strengthen supply chain and infrastructure systems.
If these challenges are addressed, Pakistan could not only meet but potentially exceed its export targets for the fiscal year, helping stabilize foreign reserves and strengthen the overall economy.
