Islamabad: Pakistan's trade deficit with nine neighboring countries surged by 36.09% in the first eight months of the fiscal year 2025 (FY25), reaching $7.36 billion, compared to $5.41 billion in the same period last year.
Recent regional political changes have contributed to increased exports to Bangladesh, Afghanistan, and Sri Lanka. However, trade with these countries has faced significant challenges in recent years due to unfavorable government policies.
Despite an increase in exports to some neighboring countries, the overall trade deficit widened, primarily due to higher imports from China, India, and Bangladesh during the period under review.
From July to February FY25, Pakistan’s exports to Afghanistan, Bangladesh, and Sri Lanka increased. However, exports to China continued to decline, according to data compiled by the State Bank of Pakistan (SBP).
Pakistan’s exports to these nine countries—Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives—rose by 6.64% to $3.10 billion, up from $2.90 billion in the same period last year.
Pakistan’s total exports during the first eight months of FY25 stood at $22.07 billion, marking an 8.42% increase from $20.36 billion in the corresponding period of FY24. However, exports to regional countries accounted for only 14.04% of the total exports.
Conversely, imports from these nine countries jumped by 25.80%, reaching $10.46 billion, compared to $8.32 billion in the same period last year.
A detailed analysis reveals that imports from China alone surged by 25.87%, reaching $10.18 billion in the first eight months of FY25, compared to $8.09 billion last year. China remains Pakistan’s largest regional trade partner, followed by India and Bangladesh.
However, Pakistan’s exports to China fell by 10.55%, dropping to $1.69 billion, compared to $1.89 billion in the same period last year.
Pakistan’s imports from India rose by 13.63%, reaching $157 million, compared to $138 million in the previous year.
In FY24, imports from India had increased by 8.86%, reaching $206.89 million, compared to $194 million in the previous fiscal year.
Meanwhile, exports to India saw a modest increase, reaching $410,000 in FY25, compared to $230,000 last year.
Pakistan’s exports to Afghanistan recorded an 84.25% increase, reaching $509.2 million in the first eight months of FY25, compared to $321 million in the previous year.
Meanwhile, imports from Afghanistan increased to $18 million, compared to $5.47 million in the corresponding period of FY24.
While Pakistan has seen export growth to certain regional markets, the overall trade deficit continues to widen due to high import dependency on China, India, and Bangladesh. The challenges of policy inefficiencies and regional trade imbalances remain key hurdles for Pakistan’s trade performance.
