Pakistan’s trade deficit with nine neighboring countries surged by 47.55% to $4.474 billion during the first five months of FY25, driven by higher imports from China and India and a decline in exports to China.
In contrast, exports to the European Union (EU) grew by 14% during the same period, reaching $4.8 billion, highlighting Europe’s growing importance as a key export destination.
During July-November FY25, Pakistan’s total exports to neighboring countries — Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives — increased by 5.99% to $1.962 billion, up from $1.851 billion in the same period last year.
However, imports from these countries surged 31.8% to $6.436 billion, up from $4.883 billion, widening the trade gap.
China accounted for the bulk of the deficit, with imports rising 32.40% to $6.276 billion in 5MFY25 compared to $4.740 billion last year. Exports to China, however, fell 13.9% to $1.053 billion, exacerbating the imbalance.
Imports from India also grew 6.19% to $94.78 million, while exports to India remained negligible at $0.375 million.
Exports to Afghanistan surged by 73.37% to $406.67 million, while exports to Bangladesh rose by 29.76% to $313.99 million. Similarly, exports to Sri Lanka increased by 25.3% to $183.89 million. Imports from Afghanistan stood at $8.53 million, while those from Bangladesh rose 18% to $30.75 million.
Trade with Iran continues informally through smuggling of petroleum products and LPG across the Balochistan border, despite the initiation of a barter trade agreement.
No trade was reported with Bhutan, and minimal trade occurred with Nepal and the Maldives.
Trade with EU
Exports to the EU grew to $4.8 billion in July-November FY25 from $4.2 billion last year, supported by strong demand in Germany, the Netherlands, Belgium, and France.
November exports to the EU rose by 16% to $894 million. Country-specific data shows exports to Germany increased by 20%, while Belgium and France also saw 20% growth each. Exports to Spain, Italy, Poland, and Denmark recorded single-digit growth.
Overall, Pakistan’s exports to the EU equaled its total exports to neighboring Asian countries, underscoring the significance of Europe as an export destination. Exports to the Americas, Africa, and Oceania also grew, with increases of 14%, 20%, and 14%, respectively.
While total exports for the first five months of FY25 rose by 12.57% to $13.691 billion compared to $12.162 billion last year, November exports declined by 5.97% to $2.804 billion from $2.982 billion in October.
The widening trade deficit with neighboring countries remains a challenge, as rising imports from China continue to outpace export growth to other markets.
