In late 2024, Prime Minister Shehbaz Sharif unveiled Uraan Pakistan, a five-year National Economic Transformation Plan that promised to double Pakistan’s exports to $60 billion by 2028-29 and reach a $1 trillion economy by 2035.

As of April 2026, Pakistan’s core export markets are facing serious structural threats. The United States, European Union, Gulf Cooperation Council, and Afghanistan, collectively accounting for about 60 per cent of Pakistan’s $30bn in goods exports in 2025, are at risk of shifting away from Pakistan as a source of supply. Before rooting for a $60bn leap in exports under Uraan, Pakistan must confront the real threat of losing 60pc share of its current export markets. Let’s examine the situation, market by market.

The United States is Pakistan’s single-largest export destination. In 2025, Pakistan exported approximately $5.9bn in goods to the US, with textiles and apparel accounting for over 90pc of that total.

When President Donald Trump began the “Liberation Day” tariffs in April 2025, Pakistan received a 29pc “retaliatory” tariff. This was a major obstacle for industries already struggling with low profit margins. The Pakistan Institute of Development Economics estimated that these tariffs could lead to a 20-25pc decline in Pakistan’s exports to the US.

After frantic diplomatic negotiations, including a high-profile visit by Field Marshal Asim Munir to Washington and the conclusion of a bilateral energy and trade framework, Pakistan secured a reduced tariff rate of 19pc by August, 2025. A relief, yes. But a solution? Considering the American president, no.

The country’s efforts remain absorbed by geopolitical talk rather than addressing development

With tariffs at 19pc, Pakistani textiles continue to carry a higher cost burden for US importers than in the pre-Liberation Day tariff period.

US inconsistency fuels tariff instability, while European Union (EU) exports face a slow-moving structural crisis. The EU is Pakistan’s largest export destination by region, absorbing approximately 30pc of total Pakistani exports, valued at $9.01bn in 2025. More than 90pc of exports to the EU benefit from the Generalised Scheme of Preferences Plus (GSP+), which provides duty-free access in exchange for adherence to 27 international conventions. Since 2014, GSP+ has nearly doubled Pakistan’s exports to the EU. This preferential access, however, is now being recalibrated with significantly stricter requirements.

First, the EU’s Carbon Border Adjustment Mechanism (CBAM) now imposes carbon costs on energy-intensive imports. These are expected to extend to the textile sector soon, and impose a direct penalty on competitiveness.

Second, Pakistan’s current GSP+ status expires in 2027. The EU, in a December 2025 agreement, overhauled its GSP framework, introducing stricter conditionality, textile-specific import safeguards, and, for the first time, migration-related conditions. The EU can now withdraw GSP+ if Pakistan fails to “cooperate on the readmission of its own nationals”. Pakistan’s adherence to the 27 conventions is uneven, and a revocation or downgrade of GSP+ status could cost Pakistan billions annually in export earnings from the EU.

The third and most damaging threat is the India-EU Free Trade Agreement (FTA). On January 27, 2026, India and the EU concluded a FTA that removes almost all tariffs on goods exported from India to the EU. Analysts and think tanks have shown concerns, labelling the India-EU FTA a “wake-up call” and even the “mother of all problems” for Pakistan. The $9.01bn EU export market now faces imminent stability risk.

Following the EU FTA, India has turned its focus to the GCC markets, moving more quickly and strategically to secure market access. In 2022, India’s Comprehensive Economic Partnership Agreement (CEPA) with the UAE sharply lowered tariffs and helped drive strong export growth, while Pakistan’s CEPA talks with the UAE remain inconclusive. India has since widened its Gulf pursuits through an Oman deal and formal FTA talks with the GCC. This has placed it well ahead in a market critical to Pakistan. The $3.08bn GCC export corridor faces competitive erosion that compounds with every FTA India signs.

Pakistan’s trade relations with Afghanistan are inconsistent. It is interdependent, politically tense, and often mishandled. In 2024, bilateral trade reached $2.15bn. Pakistan’s exports to Afghanistan amounted to $1.5bn. Both countries jointly function as vital supply-and-demand channels for essential food products, reinforcing bilateral food security.

Then came October 11, 2025. Following devastating cross-border militant attacks by the Taliban, Pakistan closed all eight major border crossings with Afghanistan. It triggered the most severe border-based trade disruption in recent years. As a result, Pakistan’s exports fell to $1.1bn in 2025.

What makes this moment worrisome is the vacuum at the centre of Pakistan’s economic policymaking, ie, the lack of a long-term national industrial policy. No coherent plan addresses the rationalisation of energy costs for export industries. The Strategic Trade Policy Framework 2025-30 remains stalled under consultation. While the Export Development Fund governance reform is still merely being “directed”.

The writer is a senior research associate at the Policy Research & Advisory Council

Published in Dawn, The Business and Finance Weekly, May 11th, 2026