In today’s challenging economic environment, innovation is a process of generating new ideas that will prevent a company from stagnation by giving its products and services a competitive edge, a compass by which the business entities would set their directions and would adopt it as a core business strategy for going forward. And customers are now more knowledgeable than ever, about the impacts of business on society and environment, so this is the time for transition to organic methods and eco-friendly products. Objectives of this study are to foresee the opportunities available in the organic textile niche markets, and examine how niche marketing and innovation is helpful to exploit these opportunities in the developing world, exclusively Pakistan, where economy mainly relies on agro-based industries with textile as a major player. Pakistan is one of the largest cotton producers in the world and due to cheap labor, has a relative advantage in producing and exporting organic textile products, as compared with developed countries. By exploiting niche market opportunities with introducing a variety of organic textile products in an innovative way, can bring a substantial amount of earnings for Pakistan