Pakistan exports around $17 billion worth of textiles annually. Walk through any major retailer in Europe or North America, and you will likely find Pakistani-made bed linen, towels or shirts. What those labels do not reveal is that an increasing share of the cotton used to make them was grown somewhere else.
In 1991-92, Pakistan harvested nearly 15 million bales of cotton, ranking among the world's leading cotton producers. By 2025-26, that figure had fallen to around 5.6 million bales — a decline of more than 60 percent in three decades. To keep its mills running, Pakistan imported millions of bales in FY2025-26, spending nearly $3 billion in foreign exchange, according to recent industry and trade estimates, on a crop it once grew in abundance.
That $3 billion rarely gets the attention it deserves. Pakistan routinely celebrates its textile export numbers without acknowledging that a growing share of those earnings is offset by the cost of importing the raw material that makes those exports possible. The $3 billion spent on cotton imports represents a substantial share of what Pakistan earns annually from IT exports — a sector the government actively promotes and celebrates. The overall picture is less impressive than the headline export figure suggests.
Punjab tells the starkest part of the story. The province alone produced 12.1 million bales at its peak in 2011-12 — more than the entire country grows today. By 2025-26, Punjab's output had collapsed to 2.7 million bales, a decline of nearly 78 percent. The land is still there. The mills are still running. The farmers have simply moved on.
The $3 billion spent on cotton imports represents a substantial share of what Pakistan earns annually from IT exports.
Pakistan did not lose its cotton sector overnight. Its decline took three decades. Farmers across Punjab's cotton belt were not choosing between patriotism and imports. They were choosing between crops that generated positive cash flow and one that often did not. Sugarcane and rice pay better, with fewer risks. The spread of solar-powered tubewells made water-intensive crops viable in areas that once depended on canal irrigation. Cotton lost the argument — not because farmers stopped caring, but because the economics stopped working.
The productivity problem compounded these pressures. Pakistan's average cotton yield stands at around 507 kilograms per hectare against China's 2,200 kilograms — a gap that reflects decades of underinvestment in agricultural research and the widespread use of substandard seed varieties. Climate change added further strain. Higher temperatures, erratic rainfall and recurring pest outbreaks, particularly pink bollworm, made cotton increasingly difficult to grow profitably. Weak agricultural extension systems have limited the transfer of knowledge and technology to farms.
Policymakers have recognised the problem, but implementation remains the real test. Punjab launched an early sowing campaign in 2025, offering incentives for timely planting. A Cotton Revival Plan was approved in late 2025, proposing to restructure research institutions and shift cotton cess collection to the FBR. Many of these proposals address long-recognised weaknesses. Whether through a credible support price or other market-based price assurance mechanisms, farmers need greater certainty about returns before acreage will recover. Announcing schemes is not the same as delivering results over multiple growing seasons.
The balance-of-payments dimension is where this stops being an agricultural story and becomes a macroeconomic one. Every bale imported to feed Pakistan's textile industry is a claim on foreign exchange that could have remained within the domestic economy. Every additional cotton import widens pressure on the current account and reduces domestic farm incomes that would otherwise circulate through Pakistan's rural economy. The cotton shortfall is quietly draining, through the back door, a significant portion of what textile exports bring in through the front.
Pakistan still excels at spinning, weaving and garment manufacturing, but the first link in that value chain increasingly lies outside its borders. The industry continues to add value — but that value is increasingly applied to fibre grown in the United States, Brazil or Central Asia. The country pays for that privilege in foreign exchange it can ill afford to spare.
Three structural changes are needed. First, cotton must become a genuinely profitable crop — not through periodic subsidies but through reliable pricing mechanisms and functioning procurement systems. Second, seed technology requires sustained public and private investment; even a modest improvement in yields would materially improve the economics of cotton farming. Third, water policy needs to reckon with the fact that solar tubewells are depleting groundwater at a pace that threatens not just cotton but wheat as well.
Pakistan's textile industry remains globally competitive. The challenge is ensuring that the first link in its value chain is once again rooted in Pakistan's own fields. Until cotton once again becomes a profitable business for farmers rather than a policy aspiration for governments, Pakistan's textile success will continue to rest on imported fibre.