ISLAMABAD, March 25: Pakistan’s trade deficit with nine of its neighboring countries has widened by 36.09% during the first eight months of fiscal year 2025 (FY25), reaching $7.36 billion, compared to $5.41 billion during the same period last year.
The trade gap with China, India, and Bangladesh has notably expanded. Higher imports from these countries have been a significant contributor to the rising deficit.
Despite growth in exports to Afghanistan, Bangladesh, and Sri Lanka, the overall trade balance with these countries worsened.
Exports and Imports Overview:
Pakistan’s total exports to the nine countries, including Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives, increased by 6.64% to $3.1 billion in the first eight months of FY25, up from $2.91 billion in the same period last year.
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Overall exports from Pakistan reached $22.07 billion in FY25, marking an 8.42% increase from $20.36 billion in FY24. However, exports to regional countries accounted for only 14.04% of total exports.
Surge in Imports:
Imports from neighboring countries surged by 25.80% to $10.46 billion in 8MFY25, compared to $8.32 billion last year.
The bulk of these imports came from China, followed by India and Bangladesh.
Exports and Imports Breakdown:
Imports from China grew by 25.87% to $10.18 billion in 8MFY25, up from $8.09 billion last year.
Exports to China, however, saw a decline of 10.55%, falling to $1.69 billion from $1.89 billion in the previous fiscal year.
Imports from India increased by 13.63% to $157.73 million, up from $138.62 million last year.
Exports to India remained minimal at $0.41 million, a slight increase from $0.23 million last year.
Exports to Afghanistan Surge:
Exports to Afghanistan saw a significant rise of 84.25%, reaching $592.84 million in 8MFY25, up from $321.75 million last year.
Imports from Afghanistan were relatively low, at $18.21 million, compared to $5.47 million in the previous fiscal year.
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Pakistan’s trade deficit with its neighboring countries has expanded significantly due to increased imports, especially from China, India, and Bangladesh.
While exports to Afghanistan, Bangladesh, and Sri Lanka have improved, the overall trade balance with the region remains concerning.
The growth in imports, especially from China, has played a central role in widening the trade gap. Pakistan will need to focus on enhancing its export performance and diversifying trade to address this imbalance.
