Pakistan’s exports to the United States have experienced a decline of 23.77 percent, dropping to $0.934 billion in July and August FY2023-24 from $1.22 billion during the same period last year, according to data released by the State Bank of Pakistan (SBP).
The main driver behind Pakistan’s declining exports to the United States is the reduction in the export of textile products, which constitutes the largest segment contributing to Pakistan’s export figures. The textile sector, vital to the country’s exports, is grappling with various challenges, including rising energy costs.
In the previous fiscal year, exports to the US saw a decline of 14.45 percent, declining to $5.92 billion from $6.92 billion in FY22. During that period, merchandise exports had been on an upward trajectory, and the US had emerged as Pakistan’s primary export destination.
The decline in exports can be attributed to several factors. One of the key challenges is a shortage of capital, which has affected businesses’ ability to invest in their export operations. Additionally, there have been delays in receiving sales tax refunds, deferred sales tax payments, and income tax refunds.
The duty drawback on local taxes and levies has also posed challenges for exporters. Additionally, the lack of access to the technology up-gradation fund has limited businesses’ ability to modernize their export processes.