🏭 The country’s apparel exports continued their upward climb through August 2025, with total shipments up 23% y-o-y, reaching USD 2.2 bn, according to data (pdf) from the Apparel Export Council of Egypt. The industry’s growth streak has now extended across eight consecutive months.

Despite pressure from higher energy, raw material, and logistics costs, apparel exports rose 18% in 2024 and grew a further 22% in the first four months of 2025, board member of the Textile Industries Chamber and chairman of Nile Textile Industries Mahmoud Ghazal told EnterpriseAM. He added that strong demand from Europe and the US, particularly for sustainable high-quality Egyptian cotton products, continues to drive growth.

The performance comes amid changing global trade dynamics, where rising tariffs, supply chain realignments, and geopolitical tensions are reshaping sourcing decisions. These headwinds appear to — so far at least — benefit Egypt’s exporters of textiles rather than hurt them.

The US remains Egypt’s largest apparel market, with exports up 14% y-o-y to USD 877 mn, according to a separate data set (pdf) from the Apparel Export Council of Egypt. But growth has been even sharper in Europe, up 36% y-o-y, where demand from Spain, Italy, Germany, and the Netherlands surged. Exports saw a record surge to Turkey, with a 86% y-o-y increase, and a 101% y-o-y rise in Saudi Arabia, while shipments to Africa, excluding Arab states, grew 56% y-o-y.

Egypt’s broad-based growth is due to both competitive pricing and an expanding web of trade agreements that grant the country no-tariff access to key markets. Through mechanisms like the Qualified Industrial Zones (QIZ) program with the US and the EU Association Agreement, Egyptian-made garments continue to enjoy duty advantages that have become even more valuable amid higher global tariffs, according to Hertzman Global Intelligence. The recent 10% tariff on many goods bound for the US, compared to the 20% imposed on other competing countries — or even more elsewhere — has positioned Egypt as a more attractive alternative for both investors and those importing to the US.

REMEMBER- The US had been considering easing its 10% tariff on Egyptian exports from QIZs and certain most-favored nation (MFN) categories. The proposal hinged on Egypt addressing several non-tariff barriers — including restrictions on ICT, data transfers, air freight, and halal certification — following discussions between US and Egyptian trade officials. The US was also open to expanding the list of products covered under the QIZ pact, such as electronics and leather goods, though not the number of participating geographical zones in Egypt.

These policy shifts have been complemented by proactive groundwork from the Apparel Export Council, which has focused in recent years on strengthening Egypt’s competitiveness through foreign direct investment, expanded domestic manufacturing, and supply chain optimization. That long-term preparation is now paying off, as manufacturers from across Asia and Europe increasingly view Egypt as a stable, strategically located production base with direct access to both the American and European markets.

Industrial integration is key to increasing textile exports and reducing import bills, Ghazal told EnterpriseAM, adding that Egypt still imports over USD 2.5 bn worth of textile raw materials annually from China. He added that fully localizing production from spinning to finished garments would help boost value-added and reduce the import bill. Such integration would enhance global competitiveness and capitalize on growing demand for sustainable products made with Egyptian cotton, he said.

A wave of foreign investment is reshaping the local textile landscape, with Turkish, Chinese, Pakistani, and Vietnamese manufacturers expanding their presence in Egypt. Turkish companies, in particular, have been quick to establish operations as challenges in their domestic market — from inflation to high energy costs — drive them abroad. Major Turkish investors such as Nil Orme, Sahinler Holding, and Eroglu Holding have all announced new projects.

At the same time, new entrants from Pakistan and China are diversifying production across categories, from socks and denim to fiber and fabric manufacturing. Together, these investments are helping Egypt close in on its 2025 apparel export target of USD 3.5 bn and move toward its longer-term ambition of USD 12 bn in exports by 2031.

Egypt’s geographic advantage has become central to its appeal. Its proximity to both the US’ East Coast and Europe allows for shorter lead times, while its relatively low labor costs and growing pool of skilled workers make it an attractive destination for nearshoring strategies. International buyers are increasingly drawn to Egypt’s reputation as a tariff-stable and logistically efficient sourcing hub, supported by strong industrial infrastructure, expanding supplier networks, and improved port operations.

Ghazal noted that sustaining export growth will require addressing structural challenges, including high input costs, outdated production technologies, and efficiency gaps across the workforce. He also said small and medium-sized factories should be integrated into value chains to strengthen the industry’s overall output. He called for a national export strategy centered on localization, training, affordable financing, and reducing bureaucratic hurdles to help domestic producers maintain their competitive edge globally.

However, the sector is not without challenges. Disruptions in Red Sea shipping have raised freight and ins. costs, while volatile energy prices and persistent FX shortages are tightening working capital across factories. A weaker EGP has improved price competitiveness abroad, but has simultaneously increased the cost of imported inputs. Beyond these structural issues, the surge in foreign investment has sparked debate within the industry about long-term competitiveness. Sector observers caution that without deeper investments in technology, workforce development, and sustainability compliance, locally owned manufacturers could be sidelined as foreign producers with stronger capital bases and expertise expand their market share.

The big picture: Egypt’s export momentum is opening a window for deeper structural upgrades in the sector, with industry experts noting that the current wave of foreign investment is raising the bar on everything from production technology to sustainability standards. To keep pace, Egyptian producers will need to invest in modern machinery, design capabilities and skills development, while the government’s expanded export rebates and plans to modernize state-owned mills aim to support that transition and prevent the sector’s gains from accruing disproportionately to foreign players.

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