ISLAMABAD: Pakistan’s trade deficit with nine neighbouring countries has grown significantly, rising 34.64% to $9.787 billion during the first ten months of FY2024-25, compared to $7.269 billion in the same period last fiscal year.
Although Pakistan’s exports to Bangladesh, Afghanistan, and Sri Lanka saw notable increases—thanks in part to evolving regional political dynamics—trade with these countries still faces hurdles due to restrictive government policies.
Despite the improvement in exports, the overall trade imbalance widened, mainly due to a surge in imports from China, India, and Bangladesh.
In FY2023-24, the regional trade deficit stood at $9.506 billion, marking a 49% rise from $6.382 billion the year before.
Export Growth Offset by Rising Imports
While exports to Afghanistan, Bangladesh, and Sri Lanka experienced robust growth during July–April FY25, overall exports to the region only increased by 2.37%, reaching $3.743 billion from $3.656 billion the previous year. In contrast, imports from these nine countries surged by 23.84%, hitting $13.530 billion, up from $10.925 billion over the same period last year, according to data from the State Bank of Pakistan.
Trade with China and India
Imports from China alone increased by 23.87%, reaching $13.191 billion in the first ten months of FY25, up from $10.649 billion in the same period last year. In FY24, imports from China were recorded at $13.506 billion—a 39.78% rise from $9.662 billion the previous year.
Meanwhile, Pakistan’s exports to China declined 11.65% to $2.070 billion, down from $2.343 billion.
Imports from India rose 14.35% to $196.77 million from $172.07 million in the same period last year. In FY24, they increased by 8.87% to $206.89 million from $190.04 million.
Pakistan’s exports to India remained minimal, at $0.51 million in 10MFY25, down from $1.25 million. In FY24, they totaled $3.669 million, compared to just $0.329 million the previous year.
Trade with Afghanistan Surges
Exports to Afghanistan rose sharply by 52.46%, reaching $666.59 million from $437.22 million. Imports from Afghanistan also saw a dramatic increase of 208%, rising to $22.77 million from $7.38 million.
Despite the growth, trade with Afghanistan faced disruptions due to the closure of the Torkham border for nearly 27 days last month. Pakistan’s primary export to Afghanistan this fiscal year has been sugar, with over 700,000 tonnes shipped in the past four months.
Trade with Other Regional Countries
- Bangladesh: Exports grew 24.77% to $668.94 million from $536.12 million, while imports increased 43.35% to $68.87 million from $48.04 million. This boost followed political shifts in Dhaka, and rice exports to Bangladesh resumed during the current fiscal year.
- Sri Lanka: Exports fell slightly by 0.52% to $326.90 million from $328.62 million, attributed to decreased economic activity there. Imports held steady at $49 million.
- Nepal: Exports dropped to $2.17 million from $2.42 million.
- Maldives: Exports edged up to $7.96 million from $7.67 million.
- Bhutan: No formal trade activity was recorded during this fiscal year or the same period last year.
Informal Trade with Iran
While formal trade figures with Iran are unavailable due to the nature of transactions, much of the activity occurs via informal channels. A barter trade system is in place, particularly for Iranian petroleum products and LPG, which continue to flow into Pakistan through Balochistan’s porous border.
