Trade gap with nine neighbours widens 44.4pc in first half
ISLAMABAD: Pakistan’s trade deficit with nine neighbouring countries widened by 44.42 per cent to $7.683 billion in the first half of FY26 compared to $5.320bn during the same period last year.
The soaring deficit was mainly due to a decline in Pakistan’s overall exports to regional countries, led by a drop in shipments to China, followed by Afghanistan and Bangladesh. Pakistan has suspended all kinds of trade, including exports, with Afghanistan since Oct 10, 2025.
In percentage terms, exports to India increased marginally, but in value terms, it is negligible. The shipments to Bangladesh and Sri Lanka registered negative growth during the period under review, according to the latest data compiled by the State Bank.
In FY25, the trade deficit with these nine neighbouring countries widened by 29.42pc to $12.297bn, up from $9.502bn in the preceding year.
The value of exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives dipped 18.56pc to $1.965bn in July-December FY26 from $2.413bn over the same period last year. Contrary to this, imports surged 24.76pc to $9.648bn in 6MFY26 from $7.733bn over the same period last year. Imports surged 20.66pc to $16.698bn in FY25 from $13.838bn over the preceding year.
Imports from China grew by 25.61pc to $9.472bn in 6MFY26 from $7.541bn over the same period last year. The bulk of imports in the region is sourced from China, followed partially by India and Bangladesh.
Exports to China fell by 5.59pc to $1.216bn in 6MFY26 from $1.288bn over the same period last year. Imports from India dipped by 12.73pc to $97.734m in 6MFY26 from $111.991m over the last year. In FY25, imports from India increased to $220.58m from $206.89m over the last year. Meanwhile, exports to India remained at $2.926m in 6MFY26, up from $0.399m over the last year.
Exports to Afghanistan dipped 56.61pc to $219.489m in 6MFY26 from $505.818m last year. Imports stood at $6.321m in 6MFY26 against $9.994m in FY25, a drop of 36.75pc.
Exports to Bangladesh declined by 7.54pc to $358.499m in 6MFY26 from $387.772m over the last year. In FY25, exports to Bangladesh increased by 19.08pc to $787.35m from $661.19m. Imports grew 7.41pc to $36.882m in 6MFY26 from $39.832m over the last year. Exports to Sri Lanka dipped by 27.13pc to $163.173m in 6MFY26 from $223.912m over the last year. Imports, however, rose 12.71pc to $33.414m in 6MFY26 from $29.647m over the last year.
Published in Dawn, January 25th, 2026
