Pakistan’s textile sector has started the new fiscal year with a modest but welcome improvement. Textile and clothing exports increased by 5.55 per cent during July-August 2026-27, reaching $3.379 billion compared with $3.202bn in the corresponding period last year. The increase, however, needs to be viewed with some caution.  For an economy that relies heavily on textiles for foreign exchange earnings, even a modest rise matters. But the more important question is whether this growth represents the beginning of a sustained recovery or merely a temporary improvement in an industry still struggling with high production costs, weak competitiveness and disruptions in important markets. The composition of the latest figures offers some encouragement. Readymade garment exports rose 13.59pc in value and 10.92pc in quantity, while knitwear exports increased 4.79pc in value and 9.24pc in quantity. Yarn exports also recorded a substantial 34.8pc increase. These figures suggest that some segments are managing to retain or expand their presence in international markets. Yet the picture is uneven. Cotton cloth exports declined 7.66pc in value and 10.38pc in quantity, while bedwear exports fell marginally in value. This divergence is important because it suggests that Pakistan is not experiencing a broad-based expansion across the textile chain. Higher-value, finished products appear to be performing better than some traditional export categories. The industry’s difficulties are not confined to international demand. Elevated energy, financing and other input costs have steadily weakened the competitiveness of Pakistani exporters. The problem is particularly serious when competing suppliers in the region can offer products at lower costs. The external environment has also become less favourable. The suspension of trade with Afghanistan since October 2025 has removed an important nearby market, while exports to parts of the Middle East have suffered amid regional conflict. Meanwhile, the industry continues to face logistical constraints. The government recently held discussions with textile exporters over delays in the clearance of consignments, with exporters calling for greater coordination between Customs, ports, terminal operators and other agencies. Predictable transit times are not a luxury for an export industry competing for time-sensitive international orders;........

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