Pakistan’s export story over the past two decades is a roller-coaster ride of promising overtures interrupted by familiar headwinds. The long view shows progress but not yet the durable scale that peer exporters have achieved.
At the heart of the narrative is the composition of the export pie. Textiles — led by knitwear, readymade garments, bedlinen, and cotton yarn — remain the anchor, contributing well over half of goods export receipts across much of the period. Value addition within this basket has inched up, with a visible shift from low-margin yarn and grey cloth towards stitched garments and home textiles during cyclical upswings. Yet concentration risk persists.
The top few categories and a handful of markets (primarily the US and the EU) still account for the lion’s share of earnings. When orders slow in these corridors or energy tariffs spike at home, the whole ship slows down.
The mid-2000s surge mapped onto a supportive global backdrop and incremental domestic reforms. Exporters benefited from relatively competitive input costs and smoother market access, which translated into volume growth in staples like home textiles and leather.
The 2008-09 global financial crisis broke momentum, but the sector proved resilient enough to recapture ground, peaking in the early 2010s as preferential access to Europe and robust US demand buoyed textiles. That phase showcased a familiar lesson, which was when the policy is predictable, energy is available, and the exchange rate is aligned with fundamentals, Pakistan’s factories can deliver.
From there, the story turns stickier. Between roughly 2014 and 2019, a mix of currency overvaluation, patchy energy supply, and rising domestic costs kept competitiveness under pressure. Pakistan did register some wins as pharmaceuticals, surgical instruments, and certain food categories found niches, but the big base did not broaden.
The pandemic shock briefly depressed shipments in 2020; then paradoxically set up a two-year surge. As consumers in advanced economies re-equipped homes, orders for bedlinen, towels, and knitwear ballooned. But as post-pandemic demand normalised, the energy price shock arrived and volumes eased, unit prices corrected, and receipts cooled from their peaks.
Behind the cycle lies a structural equation that still needs solving. First, energy competitiveness is an issue. Exporters can plan around price volatility, but not around uncertainty. A durable, transparent energy pricing framework, which reflects costs and is also predictable, would do more for garments and processors than intermittent subsidies ever could.
Second is the product depth problem. The global apparel mix is tilting towards man-made fibres (MMF), athleisure, and technical blends while Pakistan’s cotton-heavy bias leaves value on the table. Policy signals that align tariff structures and raw material availability with MMF production would unlock product variety and higher price points.
Third, logistics and lead times need improvement. Buyers now cherish speed as much as cost. Streamlining port handling, digitising customs, and scaling near-port industrial clusters can shave days off delivery windows, which would be an edge that compounds order after order.
Diversification beyond textiles remains a slow burn, but the ingredients exist. Food processing can convert volatility in primary agriculture into higher-margin, shelf-stable exports if cold chains and standards compliance mature. Surgical instruments and sports goods which are traditional bright spots can move up the value curve with branding, certification, and direct-to-retail partnerships. IT and IT-enabled services are a separate track but complementarity is real.
Market access is the fourth lever. Preferential terms in the EU have historically mattered, but the next leg will be won in the showroom. Pakistan’s apparel exporters have learnt to sell a package-design capability, compliant factories, traceability, and sustainability narratives — not just a product.
Extending that mindset to leather, plastics, and engineered goods will require industry associations and trade missions to act as aggregators of capability, especially for SMEs that cannot market alone.
What, then, does the next decade demand? Three concrete pivots. (1) Scale and specialisation: Identify two or three anchor districts and go deep with common effluent treatment, captive renewables, and one-window regulatory service. Scale reduces unit costs and specialisation raises average selling prices. (2) Input neutrality: Rationalise tariffs and SROs so exporters can import what they need, when they need it, without cascading costs especially in MMF and accessories. (3) Finance that fits the export clock: Extend pre- and post-shipment finance tenors, link pricing to demonstrated order books, and expand credit insurance so banks can lend against purchase orders with confidence.
Looking ahead, the next chapter of Pakistan’s export evolution may be written less in looms and more in lines of code. IT and services exports – already crossing the multibillion-dollar mark – are growing at a faster clip than goods and carry immense significance.
Unlike traditional merchandise, services rely more on skills than on physical infrastructure, making them less vulnerable to energy and logistics bottlenecks. They also diversify foreign exchange earnings beyond textiles, reduce concentration risk, and embed Pakistan into global digital supply chains.
The final word belongs to the numbers. They tell a story of resilience, yes, but also of an economy that has flirted with its export potential. The task ahead is to make that commitment to stay the course long enough for scale to show up not just in headlines, but in habit.
The writer is a senior banker and teaches economics