ISLAMABAD: Pakistan’s trade deficit with nine neighbouring countries widened by 34.64 per cent, reaching $9.787 billion in the first ten months of the current fiscal year (FY25), compared to $7.269 billion during the same period last year.
Exports witnessed significant growth to Bangladesh, Afghanistan and Sri Lanka, spurred by recent changes in the regional political landscape. However, trade with these countries continues to face considerable challenges, largely due to unfavourable government policies.
Despite this positive development in exports, the overall trade gap with regional countries widened, primarily due to increased imports from China, India and Bangladesh during the period under review.
In FY24, the trade deficit with these countries stood at $9.506bn, up 49pc from $6.382bn in the preceding year.
Export gains to Afghanistan, Bangladesh and Sri Lanka offset by soaring imports
Pakistan’s exports to Afghanistan, Bangladesh and Sri Lanka saw a hefty growth in July-April FY25. Still, exports to other countries, especially China, continued to decline during the period, according to data compiled by the State Bank of Pakistan.
The value of Pakistan’s exports to nine countries — Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives — rose 2.37pc to $3.743bn in July-April FY25 from $3.656bn over the same period last year.
Contrary to this, imports surged 23.84pc to $13.530bn in 10MFY25 from $10.925bn over the same period of the previous fiscal year.
Further analysis showed that imports from China grew by 23.87pc to $13.191bn in 10MFY25 from $10.649bn over the same period last year. In FY24, imports from China stood at $13.506bn, up by 39.78pc from $9.662bn over the previous year. The bulk of imports in the region are sourced from China, followed partially by India and Bangladesh.
Pakistan’s exports to China dipped 11.65pc to $2.070bn in 10MFY25 from $2.343bn over the same months in the preceding fiscal year.
Imports from India increased 14.35pc to $196.77m in 10MFY25 from $172.07m over the last year. In FY24, imports from India rose 8.866pc to $206.89m — up from $190.04m in the same period last year.
Meanwhile, exports to India remained at $0.51m in 10MFY25 against $1.25m over the last year. Exports to India stood at $3.669m in FY24 against $0.329m in the same period the previous year.
Exports to Afghanistan increased 52.46pc to $666.59m in 10MFY25 from $437.22m last year. Imports stood at $22.77m against $7.38m in 10MFY24, a growth of 208pc.
The Torkham border station remained closed for almost 27 days last month which disrupted the imports and exports to Afghanistan.
Pakistan’s main exports to Afghanistan include sugar in the current fiscal year. In the past four months, Pakistan exported more than 700,000 tonnes of sugar, mostly to Afghanistan.
No formal data is available for trade with Iran, as most of it occurs through informal channels. However, Pakistan has adopted a barter trade arrangement, especially as smuggling of Iranian petroleum products and LPG through Balochistan’s porous border continues.
Exports to Bangladesh increased by 24.77pc to $668.94m in 10MFY25 from $536.12m. Imports grew 43.35pc to $68.87m in 10MFY from $48.04m over the last year. The uptick in trade followed the ouster of the Hasina government in Dhaka. Pakistan has resumed rice exports to Bangladesh in the current fiscal year.
Exports to Sri Lanka dropped 0.52pc to $326.90m in 10MFY25 from $328.62m the last year. This decline was attributed to reduced economic activity in Sri Lanka. Imports from Sri Lanka remained static at $49m during the months under review.
Shipments to Nepal fell to $2.17m from $2.42m over the last year.
Exports to Maldives rose to $7.96m in 10MFY25 from $7.67m over the last year. No trade activity was recorded between Pakistan and Bhutan during the current fiscal year or the corresponding period last year.
Published in Dawn, May 22nd, 2025
