Pakistan’s regional trade deficit rises 41.37% to $9 billion in 7MFY26 as exports fall

Pakistan’s trade deficit with nine regional countries widened 41.37% to $9.001 billion in the first seven months of FY26 (July-January), from $6.367 billion in the same period last year, as exports to key regional markets declined and imports continued to rise.

State Bank of Pakistan data showed exports to the nine countries fell 16.86% to $2.307 billion in 7mFY26, compared with $2.775 billion a year earlier. The countries include Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives.

Imports from these markets rose 23.69% to $11.31 billion in 7mFY26, up from $9.14 billion in the corresponding period last year. The increase in imports, alongside lower exports, widened the overall regional trade gap.

Trade with Afghanistan, including exports, has remained suspended since October 10, 2025. SBP figures showed Pakistan’s exports to Afghanistan dropped 59.07% to $228.96 million in 7mFY26 from $559.52 million last year.

Imports from Afghanistan also fell, with the reported value at $6.36 million, down 58.18% from $15.21 million. The decline in Afghanistan trade was one of the largest contributors to the fall in Pakistan’s regional exports.

China remained Pakistan’s largest import source in the region. Imports from China increased 24.58% to $11.097 billion in 7mFY26 from $8.907 billion a year earlier.

پاکستان’s exports to China, however, slipped 1.02% to $1.467 billion in 7mFY26 from $1.482 billion. China accounted for the bulk of Pakistan’s regional imports, followed by India and Bangladesh.

Exports to Bangladesh fell 10.48% to $417.62 million in 7mFY26 from $466.55 million last year. Imports from Bangladesh also declined to $42.17 million from $49.05 million, a drop of 14.02%.

Exports to Sri Lanka dropped 28.89% to $184.48 million in 7mFY26 from $259.43 million. Imports from Sri Lanka rose 11.63% to $38.57 million from $34.55 million.

Trade with India remained limited. Imports from India fell 9.44% to $122.56 million in 7mFY26 from $135.35 million, while exports to India remained low at $2.926 million, up from $0.404 million.

The SBP data also showed Pakistan’s regional trade deficit had already expanded in FY25. The gap rose 29.42% to $12.297 billion in FY25 from $9.502 billion in the previous year.

For FY25, exports to the nine regional countries rose 1.49% to $4.401 billion from $4.336 billion. Imports in the same period increased 20.66% to $16.698 billion from $13.838 billion.

Imports from China in FY25 stood at $16.312 billion, up 20.79% from $13.504 billion. In the same year, imports from India increased to $220.58 million from $206.89 million.