- Yarn-led growth into China sustains Pakistan’s momentum
- India’s response hinges on value addition, cost parity, and market diversification
Pakistan’s textile and apparel exports to China have grown through 2025, with shipments rising steadily on the back of cotton yarn and selected value-added products. Exports for January-November 2025 stood near $490 million, with cotton yarn continuing to dominate volumes. At the same time, smaller but faster-growing categories such as women’s wear, home textiles, carpets, and baby garments recorded strong percentage gains, indicating early diversification beyond raw and semi-processed items.
This performance matters for India because China remains an important, though competitive, destination for Asian textile suppliers. China imports yarn and textiles to bridge domestic supply gaps, manage price volatility, and serve its downstream apparel and home textile industries. Pakistan’s ability to hold and expand share in this market highlights the intensifying contest among regional exporters at a time when global textile demand remains uneven and price-sensitive.
The drivers behind Pakistan’s gains are largely structural. Competitive cotton yarn pricing, proximity to China, and preferential access under the China-Pakistan Free Trade Agreement have helped Pakistani exporters defend volumes even as global demand remains soft. Incremental movement into consumer-facing textile categories suggests an effort to reduce reliance on yarn alone and capture better margins, though the export basket is still heavily skewed toward low to mid-value products.
For India, the development underscores a mixed picture. On one hand, India competes directly with Pakistan in cotton yarn exports to China, particularly in coarse and medium counts. When Pakistan ships aggressively, Indian yarn exporters face sharper price pressure and thinner margins, especially in a global environment already weighed down by surplus cotton and cautious buying from Chinese mills. On the other hand, India’s textile export base is far broader, spanning yarn, fabrics, garments, and technical textiles, giving it strategic flexibility that Pakistan lacks.
Why this matters now is linked to India’s current cost and policy environment. High domestic cotton prices driven by minimum support price (MSP), uneven quality due to weather disruptions, and intermittent import-duty policy shifts have kept Indian raw material costs elevated versus some competitors. This weakens India’s price competitiveness in yarn, precisely where Pakistan is strongest in China. At the same time, Indian spinning millers have been operating below optimal capacity due to weak global demand, limiting their ability to chase low-margin export volumes aggressively.
Outlook
Looking ahead, the outlook from India’s perspective points to a clear strategic choice rather than a volume race. Competing head-to-head with Pakistan in low-margin yarn into China may not be sustainable unless domestic cotton parity improves. Instead, India is better placed to deepen its push into value-added segments-processed fabrics, branded garments, and compliant home textiles-where scale, design capability, and supply-chain depth offer differentiation. China’s import demand is also evolving toward higher quality, consistent delivery, and sustainability-linked sourcing, areas where Indian exporters can build an edge.
In parallel, India’s multi-market export strategy remains a key buffer. While Pakistan’s China exposure is rising, India continues to spread risk across the US, EU, Middle East, and East Asia. For brokers and exporters, Pakistan’s steady China performance is a reminder that regional competition is intensifying, but it also reinforces that India’s long-term competitiveness lies less in chasing yarn volumes and more in moving decisively up the textile value chain.
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