Pakistan’s trade deficit with nine neighboring countries expanded by 36.09% to reach $7.36 billion in the first eight months of FY25, compared to $5.41 billion during the same period last year.
While recent political changes in the region have boosted exports to Afghanistan, Bangladesh, and Sri Lanka, Pakistan’s overall trade with these countries has been hindered by unfavorable government policies in recent years.
According to data compiled by the State Bank of Pakistan, the value of Pakistan’s exports to nine neighboring countries—Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives—grew by 6.64%, totaling $3.1 billion in the first eight months of FY25, compared to $2.91 billion during the same period last year.
However, Pakistan’s share in total exports to these countries remains low at around 14.04%.
Despite a rise in exports to Afghanistan, Bangladesh, and Sri Lanka, the widening trade gap was mainly driven by higher imports from China, India, and Bangladesh.
Exports to Afghanistan, Bangladesh, and Sri Lanka surged between July and February FY25. However, exports to other countries, particularly China, saw a decline during this period.
On the import side, Pakistan’s imports from these countries increased by 25.80%, reaching $10.46 billion in FY25, up from $8.32 billion in FY24. Imports from China, which make up a significant portion of the regional imports, grew by 25.87% to $10.18 billion in the eight months, compared to $8.09 billion last year.
Imports from India also rose by 13.63%, totaling $157.73 million in FY25 compared to $138.62 million last year. Exports to India remained stagnant at $0.41 million in FY25, up slightly from $0.23 million in the same period last year.
Exports to Afghanistan saw a significant increase of 84.25%, reaching $592.84 million in FY25, compared to $321.75 million in FY24. Imports from Afghanistan also grew to $18.21 million, up from $5.47 million last year.
