ISLAMABAD: Despite the continuation of the GSP+ status, Pakistan’s exports to major Western and Northern European markets fell in the first 10 months of 2025-26 compared with the same period a year earlier, raising serious questions for policymakers.

However, the overall export to Europe grew modestly, with an uptick in shipments to Southern and Eastern European countries during the July-April period.

The ongoing conflict in the Middle East has accelerated the decline in exports to these markets, in addition to the European Union’s preferential market access offered to India, one of Pakistan’s key competitors in textiles.

For Pakistani exporters, the evolving situation presents a dual challenge: maintaining compliance with EU conditions while facing stiff competition from countries gaining preferential or expanded market access.

Western and Northern shipments fell in 10MFY26, with an uptick in Southern and Eastern

Trade analysts warn that the ongoing conflict in the Middle East could further dampen export demand, as rising energy costs are likely to squeeze consumer spending in Europe, which is already under strain from the economic fallout of the war in Ukraine.

Official data compiled by the State Bank of Pakistan showed that exports to European countries recorded a meagre 0.51 per cent year-on-year rise to $7.608 billion in the first 10 months of 2025-26.

In FY25, the exports to the EU rose 7.44pc year-on-year to $8.863bn. In FY24, exports to the EU dipped 3.12pc to $8.240bn.

There will be a bigger challenge for exporters to retain market share following the ongoing conflict in the Middle East, coupled with rising input costs in the country.

Exports to Northern Europe dipped 0.79pc to $618.52m in 10MFY26 from $623.47m a year ago.

However, there is an uptick in exports to Eastern and Southern Europe.

Exports to Southern Europe grew by 5.75pc to $2.705bn in 10MFY26 from $2.558bn in the corresponding period last year. In this region, exports to Spain grew 7.04 pc to $1.322bn from $1.235bn in the preceding year.

Exports to Italy increased 3.52pc to $969.44m in 10MFY26 compared to $936.45m a year ago. Exports to Greece declined by 9.85pc to $110.93m, down from $123.06m.

However, exports to Eastern Europe grew 5.09pc to $620.63m in 10MFY26 from $590.57m a year ago.

Before Brexit, Pakistan’s major export destination was the United Kingdom. In the post-Brexit period, Pakistan’s exports to the UK decreased slightly to $1.801bn in 10MFY26 from $1.813bn in the corresponding period last year, a decline of 0.66pc.

In FY25, Pakistan’s exports to the UK increased by 7.19pc to $2.160bn from $2.015bn in the preceding year.

Western Europe, which includes countries such as Germany, the Netherlands, France, Italy, and Belgium, accounts for the largest share of Pakistan’s exports to the EU. Exports to this region slightly fell by 3.53pc to $3.664bn in 10MFY26, from $3.798bn in FY25.

Exports to Germany dipped 3.53pc to $1.369bn in 10MFY26 from $1.419bn. Similarly, exports to the Netherlands, the second-largest market for Pakistani goods, fell by 3.53pc to $1.227bn in 10MFY26 from $1.272bn over the corresponding period last year.

Exports to France fell by 3.26pc to $457.99m in 10MFY26 from $473.43m, followed by a 4.23pc decline to Belgium’s $440.67m against $460.12m.

Published in Dawn, May 24th, 2026