Will my hair regrow on scalp around the stitched area?

Yes hair should grow around the stitches provided there is no shock loss around the stitches. Shock loss is rare and fortunately even if there is shock loss, this will grow back.

Yes, hair will grow up  sides of stitches but you may have a long, 2-4 mm width pretty visible scar on back of your head in FUT technique because doctor has to cut your skin to harvest a strip of skin as a source of grafts and suture this skin gap to close .

Hello Good Evening and thank you for your question.  FUT when closed under trichophytic closure the hair follicles surrounding the area will certainly continue to grow hair and also the scar should be only about 2-3 mm, which should be hardly visible when the hair in the donor area is 1-2 cms in length. 
Regards,