Pakistan’s textile waste could unlock $773m export opportunity

The State Bank of Pakistan says textile waste could open an export opportunity worth $773m, according to Mettis Global. Its Half Year Economic Report 2025-26 calculates that formally collecting and processing 50% (850,000 tons) of the 1.7m tons generated each year could unlock that value. The timing matters because the European Union, which takes 40% of Pakistan's textile exports, is introducing binding circularity rules.

Pressure on exports is significant, since over 80% of shipments go to the EU, US and UK. Buyers in those markets are tightening environmental, social and governance procurement standards, climate disclosure rules and product traceability requirements. The central bank also flags an expected extension of the EU's carbon border adjustment mechanism to textiles by 2030. Meanwhile, about 90% of collected domestic textile waste is downcycled into mops and cleaning rags, due to fragmented informal waste picking and missing sorting infrastructure.

Secondhand clothing offers a model: used textiles imported at a value of $180m are graded and resold to lower-income markets at $266m. Basic mechanical recycling, despite sorting losses, could produce bleached recycled fibre averaging $1.4 per kilogram, with a 65% usable fibre rate. To capture this, the report recommends a national roadmap for textile circularity keyed to EU deadlines, a Digital Product Passport, certified training for waste handlers, and private capital for chemical recycling and AI-based sorting.