I would be very interested in figheadair's take on this, but yes. It has the characteristics of a selvedge mark as is sometimes done. Are you sure this is of Pakistani origin? Have you tested the material to see if it's acrylic, wool, PV, etc.?

Of course, it could just be a weaving error, but either way, my hunch is that the selvedge is under that blind hem stitching and you could proceed with your plan to let it out.