Pakistan’s trade deficit with nine neighbouring countries expanded by 34.64 percent in the first ten months of the current fiscal year, reaching $9.787 billion compared to $7.269 billion during the same period last year, according to State Bank of Pakistan data.
While exports to Bangladesh, Afghanistan, and Sri Lanka showed notable increases due to shifting regional dynamics, persistent government policy challenges continue to affect overall trade relations with these countries.
The widening deficit primarily stems from a sharp rise in imports from China, India, and Bangladesh. In the July-April period of FY25, Pakistan’s exports to the nine neighbours—including Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives—increased slightly by 2.37 percent to $3.743 billion from $3.656 billion in the previous year.
Meanwhile, imports surged by 23.84 percent to $13.530 billion, compared to $10.925 billion in the same period last year. Imports from China alone rose 23.87 percent to $13.191 billion, continuing to dominate Pakistan’s regional import profile. In contrast, exports to China dropped by 11.65 percent to $2.070 billion.
Imports from India increased by 14.35 percent to $196.77 million, while exports to India fell sharply to $0.51 million, down from $1.25 million in the previous year.
Afghanistan saw a 52.46 percent rise in exports from Pakistan to $666.59 million, with imports also growing significantly by 208 percent to $22.77 million despite disruptions caused by a 27-day closure of the Torkham border last month. Pakistan’s main exports to Afghanistan this fiscal year included over 700,000 tonnes of sugar.
Trade with Iran remains largely informal, with barter arrangements in place amid ongoing smuggling of Iranian petroleum products across the porous Balochistan border.
Exports to Bangladesh rose 24.77 percent to $668.94 million, accompanied by a 43.35 percent increase in imports to $68.87 million. This growth followed the recent political change in Dhaka and the resumption of rice exports.
Exports to Sri Lanka declined marginally by 0.52 percent to $326.90 million, reflecting slowed economic activity, while imports from Sri Lanka remained stable at $49 million.
Other neighbours saw limited trade activity, with exports to Nepal decreasing to $2.17 million and to the Maldives increasing slightly to $7.96 million. No trade was recorded with Bhutan in the reviewed period.
The trade gap with these nine countries was $9.506 billion in FY24, marking a 49 percent increase from $6.382 billion the previous year, highlighting a continuing trend of rising import bills overshadowing export gains in the region.
