Pakistan’s trade deficit with nine neighboring countries rose sharply by 43.22% to $5.328 billion in the first half of the fiscal year 2025 (H1 FY25), compared to $3.72 billion in the same period last year, according to data from the State Bank of Pakistan (SBP).
The widening trade gap is attributed primarily to a significant increase in imports from China, India, and Bangladesh, while exports to China saw a decline.
During the six-month period, Pakistan’s total exports to these nine countries—Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives—rose by 7.85% to $2.404 billion, compared to $2.229 billion in H1 FY24. However, this growth was outpaced by a steep rise in imports, which jumped by 29.97% to $7.732 billion, up from $5.949 billion during the same period last year.
Imports from China surged by 30.42% to $7.541 billion in H1 FY25, compared to $5.782 billion in the corresponding period last year. China remains the largest trading partner in the region, with Pakistan sourcing the bulk of its imports from there, followed by India and Bangladesh.
Despite the overall rise in exports, Pakistan’s shipments to China witnessed a decline. Conversely, exports to Afghanistan, Bangladesh, and Sri Lanka recorded modest growth, offsetting some of the losses from reduced exports to China.
In FY24, the trade deficit with these nine countries reached $9.506 billion, marking a 49% increase from $6.382 billion in FY23. For the first half of FY25, exports accounted for only 14.51% of Pakistan’s total trade volume with regional partners, reflecting the country’s limited penetration in regional markets.
Pakistan’s total exports during H1 FY25 stood at $16.56 billion, an increase of 10.52% from $14.98 billion in the same period last year. However, the imbalance with regional trading partners underscores the challenges in diversifying trade and reducing dependency on imports, particularly from China.
