Pakistan’s Textile Exports at Crossroads as Bangladesh Tightens Competition

ISLAMABAD | August 18, 2025 – Pakistan’s textile industry faces a defining moment as global supply chains shift away from China and US tariffs reshape regional trade dynamics. While India struggles with steep 25% tariffs on textile exports, creating a lucrative opening for Pakistani suppliers, Bangladesh’s resurgence poses a serious challenge.

Pakistan currently enjoys only a narrow 1% tariff edge (19% vs 20%) over Bangladesh in the US market. However, Dhaka’s scale advantage – a $47 billion garment export sector employing 4.1 million workers – dwarfs Pakistan’s $16 billion total exports across all industries. Adding to the pressure, Bangladesh’s energy tariffs remain up to 60% lower than Pakistan’s.

This leaves Islamabad in a three-front battle: outcompeting India by leveraging a cost advantage, differentiating against Bangladesh through quality and sustainability, and diversifying beyond textiles into pharmaceuticals, IT, and processed foods.

Industry experts warn that Pakistan’s tariff advantage may be short-lived. Without aggressive policy support and strategic positioning, the country risks losing this once-in-a-decade chance to strengthen its global export footprint.