Pakistan’s textile and apparel exports to China continued to expand through 2025, underscoring intensifying regional competition in Asia’s largest textile import market. Shipments during January–November 2025 are estimated at close to $490 million, led overwhelmingly by cotton yarn, which remains the backbone of Pakistan’s export basket to China.
Alongside yarn, several smaller but faster-growing categories recorded strong percentage gains, including women’s wear, home textiles, carpets, and baby garments. While these segments still account for a modest share of total exports, their growth points to early efforts by Pakistani exporters to diversify beyond raw and semi-processed products and move gradually toward higher-value items.
China continues to import yarn and textiles to address domestic supply gaps, manage price volatility, and support its downstream apparel and home textile industries. Pakistan’s ability to defend and expand its share in this market highlights the increasingly competitive environment among Asian suppliers at a time when global textile demand remains uneven and highly price-sensitive.
The drivers behind Pakistan’s performance are largely structural. Competitive cotton yarn pricing, geographic proximity, and preferential access under the China–Pakistan Free Trade Agreement (CPFTA) have helped exporters sustain volumes despite weak global demand. Incremental expansion into consumer-facing categories suggests a strategic intent to improve margins, though Pakistan’s export mix remains heavily skewed toward low- to mid-value products.
For India, the trend presents a mixed picture. Indian exporters compete directly with Pakistan in cotton yarn shipments to China, particularly in coarse and medium counts. Aggressive Pakistani pricing has added pressure on Indian yarn exporters’ margins, especially amid surplus global cotton supplies and cautious buying by Chinese mills.
At the same time, India’s textile sector retains structural advantages that Pakistan lacks. India’s export base spans yarn, fabrics, garments, home textiles, and technical textiles, offering greater flexibility to shift markets and product mixes as demand evolves.
Cost and policy factors remain a near-term challenge for Indian yarn competitiveness. High domestic cotton prices linked to MSP, quality variability following weather disruptions, and intermittent changes in import-duty policy have kept raw material costs elevated. Combined with sub-optimal capacity utilisation at spinning mills due to weak global demand, this has limited India’s ability to compete aggressively in low-margin yarn exports to China.
Outlook
From India’s perspective, the developments point to a strategic choice rather than a volume-driven contest. Competing head-on with Pakistan in low-margin yarn exports to China appears increasingly difficult unless domestic cotton parity improves. Instead, India is better positioned to deepen its focus on value-added segments, including processed fabrics, compliant home textiles, and branded garments, where scale, design capability, and supply-chain depth provide differentiation.
China’s import demand is also gradually shifting toward higher quality, consistency, and sustainability-linked sourcing, areas where Indian exporters can strengthen their competitive edge. Meanwhile, India’s diversified export footprint across the US, EU, Middle East, and East Asia continues to act as a buffer against single-market exposure.
For exporters and trade watchers, Pakistan’s steady gains in China serve as a reminder that regional competition is sharpening. At the same time, they reinforce the view that India’s long-term competitiveness lies less in chasing yarn volumes and more in moving decisively up the textile value chain.
