Egypt Stakes Its Claim as Global Textiles and Apparel Powerhouse

The foundation of Egypt's textile fightback lies in a compelling array of structural advantages that major international brands are increasingly taking cognisance of. At the heart of this steady trend is Egypt's remarkably cost-competitive labour force, offering substantial cost savings compared to rivals across the Mediterranean in Turkey, where monthly wages hover around $500–900. In Egypt, the range is roughly $140–240. This cost advantage becomes even more pronounced when considering that about 58% of Egypt's population is still under 30.

Labour costs are not the only factor here. Egypt's strategic trade positioning offers manufacturers unprecedented market access. The country's network of trade agreements creates multiple pathways to key consumer markets without prohibitive tariffs. The QIZ programme with the United States allows Egyptian manufacturers to export duty-free to the American market, provided they meet specific Israeli input requirements. Meanwhile, the EU-Egypt Association Agreement provides preferential access to European markets, and Egypt's participation in AfCFTA (African Continental Free Trade Area) ensures access to the entire African continent.

The current Egyptian dispensation has recognised textile manufacturing as a strategic priority, implementing initiatives designed to attract investment and modernise the sector. Government initiatives including tax incentives for manufacturing SMEs under existing legislation, while Law No. 6 of 2025 streamlines customs procedures This legislative framework complements the government's ambitious textile modernisation plan, which involves at least $1.1 billion in investment and sets targets to double exports to $12 billion by 2031.

But then, Egypt's advantages extend beyond policy and geography: exceptional raw materials and competitive operational costs. The country's Giza 45 cotton, considered among the world's finest, provides access to premium but limited-volume specialty cotton. With a minimum wage of approximately $146 USD per month (EGP 7,000) and industrial electricity costs of roughly $0.039 per kWh, manufacturers can maintain competitive production costs. This is critical.

The surge in Egypt's textile exports is more than just statistical growth. Observers believe this is the result of a fundamental shift in how major international brands have started approaching their sourcing strategies in the backdrop of the COVID-19 pandemic, and the ongoing conflicts. Egypt's readymade garment exports rose 18% to $2.84 billion in 2024, marking a significant acceleration from the previous year's $2.41 billion. This drift has carried strongly into 2025, with first-quarter exports jumping 24% year-on-year to $812 million and the achievement of surpassing $1 billion in exports during the first four months of 2025 underscoring the sector's robust health.

The geographical distribution of Egypt's export growth reveals strategic market diversification that reduces dependency on any single region. Exports to the United States—the largest market—grew 17% to $1.19 billion in 2024, with the momentum continuing into 2025 as first-quarter US exports increased 12% to $299 million. European markets showed even stronger growth, with exports first jumping 34% to $689 million in 2024 and then 43% to $206 million in the first quarter of 2025. Most remarkably, exports to African countries (excluding Arab nations) experienced a phenomenal growth of 140% in 2024, followed by a 121% rise in the first quarter of 2025.

This is not only about favourable trade conditions—global brands are indeed shifting their sourcing strategies towards Egypt. As first noted in Better Work's 2023 report and continuing through 2025, major retailers including H&M, Zara, and PVH are increasing their sourcing from Egyptian manufacturers. So far, there has been no dip in the flow.

Moreover, the sheer spread of Egypt's export growth across multiple markets and client segments indicates that the country is not merely benefiting from temporary supply chain disruptions elsewhere, but is establishing itself as a long-term sourcing destination. The textile sector's performance indicates sustained growth prospects that extend well beyond current levels, with manufacturers reporting increased order books and expansion plans across multiple facilities.

The growth trajectory notwithstanding, there are other issues. Right now, the textiles industry is facing structural challenges that require substantial investment and strategic planning. Infrastructure limitations remain a headache and a potential disruptor, with transport, logistics, and outdated machinery creating bottlenecks that can impact production efficiency and delivery schedules. These are simmering issues. The situation is compounded by the country's economic volatility, with 27.4% urban inflation in May 2025 creating cost pressures that manufacturers would need to sort out.

The biggest problem, probably, is with foreign exchange volatility since an export-oriented industry needs to balance local cost structures with international pricing demands. And, these are nothing new—these macroeconomic pressures have historically hindered Egypt's industrial development, but the current wave of foreign investment, particularly from Chinese companies, is providing both capital and expertise to address these challenges systematically.

Chinese investments have emerged as a catalyst for textile sector transformation. Egypt secured about $70 million in fresh Chinese textile investments in June 2025 alone. Major commitments include Zhejiang Holding's plans for $20 million in initial investment with ambitions to reach $50 million within five years, and Jiangsu Haite Fashion Company's $20 million commitment for a new garment factory. These come on the heels of Jiangsu Guotai's March 2025 agreement for a $10 million garment factory in the Suez Canal Economic Zone.

The scale of Chinese involvement goes far beyond factory investments. There have been reports of  potential largescale industrial developments, but those would take time to show results. All these will have a bearing on Egypt's manufacturing capacity. The projects, taken together, reflect China's strategic interest in diversifying its manufacturing base (for more reason than one) and Egypt's own potential in emerging as a production platform for global apparel and textile markets.

The broader context of Chinese investment in Egypt's industrial zones has generated significant interest, suggesting that textile investment is part of a larger strategic relationship. This Chinese involvement brings not only capital but also advanced manufacturing technologies, management expertise, and established supply chain relationships that can help Egyptian manufacturers compete more effectively in international markets. Leave political compulsions aside for the moment.

The convergence of Egypt's natural advantages, government support, and substantial foreign investment is creating a textile manufacturing ecosystem positioned for sustained growth. The country's ability to maintain export growth despite global economic uncertainties demonstrates the underlying strength of its competitive position. The textile sector is entering a phase of accelerated development that could reshape regional manufacturing patterns and establish Egypt as a permanent fixture in the global supply chain.

The success of Egypt's textile transformation will ultimately depend on the industry's ability to balance rapid growth with quality improvements, infrastructure development, and workforce training. However, the combination of strategic advantages, growing international brand confidence, and substantial Chinese investment suggests that Egypt is well-positioned to achieve its ambitious export targets.