The year 2020 was a rollercoaster for Pakistan’s textile industry. As the largest contributor to national exports and a major employer, the sector faced unprecedented disruptions due to the COVID-19 pandemic. However, by the end of the year, it had also positioned itself for a resilient recovery, aided by shifting global supply chains and targeted policy support.

Disruptions and Early Setbacks

In early 2020, Pakistan’s textile mills and garment factories were hit hard by lockdowns and global order cancellations. International retail brands scaled back buying due to plummeting consumer demand. According to the Pakistan Bureau of Statistics, textile exports dropped to $11.6 billion in FY2020, down from $13.3 billion in FY2019.

The local supply chain also suffered. Raw material imports were delayed, finished goods piled up, and over 7 million workers faced job insecurity. Many small- and medium-sized manufacturers either shut down or operated at significantly reduced capacity.

Pivoting to PPE and Digital Markets

Amid the crisis, some large textile players quickly repurposed their production lines to manufacture personal protective equipment (PPE), including face masks, medical gowns, and coveralls. Companies like Interloop, Nishat Mills, and Gul Ahmed capitalized on global PPE shortages, securing export orders to the US and Europe.

Domestically, retailers like Khaadi and Outfitters shifted focus to e-commerce. The pandemic forced consumers online, and textile brands responded by strengthening logistics, revamping websites, and introducing contactless delivery options.

Policy Support and Financial Relief

The government intervened with fiscal support. The State Bank of Pakistan introduced the Temporary Economic Refinance Facility (TERF), providing subsidized loans to modernize equipment and keep operations running. The Ministry of Commerce also released the draft Textile Policy 2020–25, outlining incentives, tax breaks, and investment zones.

Global Realignments Favoring Pakistan

With India and Bangladesh facing prolonged COVID-19 waves, many international buyers turned to Pakistani exporters for reliable delivery timelines. This led to a surprising surge in orders in Q4 2020. The All Pakistan Textile Mills Association (APTMA) reported full production capacity in some clusters by December.

Additionally, export orders began diversifying beyond cotton to value-added products like home textiles and sportswear, aligning with global trends.

Lingering Challenges

Despite the rebound, problems remained. Cotton output hit a historic low, forcing more expensive imports. Energy shortages, outdated infrastructure, and inconsistent policy implementation continued to haunt the industry. Nonetheless, the strategic advantage gained during 2020 opened a window of opportunity.

If capitalized effectively, 2020 may be remembered not only as a crisis year but as the beginning of Pakistan’s textile reinvention.

References:

Pakistan Bureau of Statistics – Export Data 2020. https://www.pbs.gov.pk

Ministry of Commerce – Textile Policy 2020–25 Draft. https://www.commerce.gov.pk

State Bank of Pakistan – TERF Facility Update 2020. https://www.sbp.org.pk

Business Recorder – PPE Exports by Textile Firms, July 2020. https://www.brecorder.com

Dawn News – “Textile Sector Recovery Post-COVID”, Dec 2020. https://www.dawn.com