Trade Deficit with Nine Neighbouring Countries Increases in FY25
Pakistan’s trade deficit with nine neighboring nations increased by 40.42% to $6.379 billion in the first seven months of the current 2025 fiscal year (FY25) compared to last year’s $4.543 billion.
This widening of the trade gap is primarily attributed to increased imports from China, India, and Bangladesh. Exports to Afghanistan, Bangladesh, and Sri Lanka, however, increased substantially between July and January FY25, offsetting the decline in exports to China.
Pakistan’s trade deficit with these nations in FY24 was $9.506 billion, a 49% increase from $6.382 billion in the last year.
Exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives grew 5.91% to $2.763 billion in FY25, up from last year’s $2.609 billion.
Total exports by Pakistan from July to Jan, FY25 amounted to $19.58 billion, 10.16% higher than last year’s $17.77 billion. Still, their percentage share of overall exports is modest at 14%.
Concurrently, imports from the nations rose by 27.83% to $9.142 billion during FY25 from $7.152 billion during the same period last year.
Significantly, Chinese imports increased by 27.99% to $8.907 billion in FY25 from $6.959 billion last year. The overall value of Chinese imports in FY24 was $13.506 billion, up by almost 40% compared to the last year. China is still the biggest source of imports in the region, followed by India and Bangladesh.
Pakistan’s exports to China declined by 14.36% to $1.478 billion in FY25 from $1.726 billion last year.
Imports from India increased by 12.21% to $135.35 million in FY25, up from $120.62 million during the same period last year. Exports to India also improved, rising to $0.4 million in FY25 from $0.15 million in FY24.
Exports to Afghanistan registered a significant increase of 94.16% to $556.86 million in FY25 from $286.79 million during the previous year. Imports from Afghanistan were negligible at $15.21 million.
No official statistics are available for trade with Iran since most of it is done through unofficial means. Pakistan has also opted to do barter trade with Iran because of the continued smuggling of Iranian products, including petroleum products, through Balochistan’s open border.
Exports to Bangladesh increased by 28.74% to $465.33 million, and imports increased by 44.90% to $49.05 million. This followed political developments in Bangladesh. There was a major agreement in early 2025, where Pakistan committed to supplying 50,000 tonnes of rice to Bangladesh.
Exports to Sri Lanka increased by 12.34% to $256.19 million, while imports stood at $34.55 million. Exports to Nepal fell marginally, while exports to the Maldives rose marginally to $5.53 million. There was no trade recorded with Bhutan.
