Pakistan’s trade deficit with its nine neighbouring countries expanded by 40.42% to $6.379 billion in the first seven months of the current fiscal year (FY25), compared to $4.543 billion in the same period last year. The widening gap was primarily driven by increased imports from China, India, and Bangladesh, while exports to Afghanistan, Bangladesh, and Sri Lanka saw a notable rise.
Between July and January, Pakistan’s total exports to regional countries rose 5.91% to $2.763 billion, compared to $2.609 billion last year. However, overall imports surged 27.83% to $9.142 billion, up from $7.152 billion in the corresponding period of FY24.
Exports to China, which make up a significant portion of Pakistan’s regional trade, declined 14.36% to $1.478 billion, while imports from China increased 27.99% to $8.907 billion.
Trade with India also saw an uptick, with imports growing 12.21% to $135.35 million, while exports to India remained marginal at $0.40 million. In contrast, exports to Afghanistan nearly doubled, rising 94.16% to $556.86 million, while imports from the neighbouring country stood at $15.21 million.
Pakistan’s trade with Bangladesh also increased, with exports rising 28.74% to $465.33 million and imports jumping 44.90% to $49.05 million. The shift in trade dynamics follows the recent political change in Dhaka, which led to enhanced economic engagement between the two countries.
As a result, a Pakistan National Shipping Corporation (PNSC) vessel carrying 26,250 tonnes of white rice is set to reach Bangladesh on March 4, following a government-to-government rice deal signed in February.
Exports to Sri Lanka grew by 12.34% to $256.19 million, while imports remained stable at $34.55 million. Trade with Nepal declined slightly, with exports falling to $1.62 million, while exports to the Maldives edged up to $5.53 million. No recorded trade activity took place between Pakistan and Bhutan.
While the region’s trade balance remains tilted against Pakistan, efforts are underway to expand exports, particularly in agriculture and manufacturing, to narrow the deficit. However, persistent reliance on imports from China and rising trade with India and Bangladesh continue to exert pressure on Pakistan’s overall trade balance.
