Pakistan’s Trade Deficit with Neighboring Countries Reaches $8.4 Billion in FY25
ISLAMABAD – Pakistan’s trade deficit with nine neighboring countries has gone up by 34.37%, reaching $8.467 billion in the first nine months of FY25. This is a huge increase from $6.301 billion in the same period last year.
The increase in exports to nations such as Bangladesh, Afghanistan, and Sri Lanka is also partly a result of recent political developments in the region. Trade with these nations has, however, been experiencing challenges, primarily because of government policy-related challenges.
Even though there has been an increase in exports to some of its neighbors, Pakistan’s overall trade deficit has increased. This is primarily due to an increase in imports from China, India, and Bangladesh.
In FY24, the trade deficit was $9.506 billion, up 49% from $6.382 billion in the previous year.
Export and Import Trends
During July to March of FY25, Pakistan’s exports to Afghanistan, Bangladesh, and Sri Lanka picked up momentum. But exports to the rest of the world, particularly to China, declined continuously. The combined value of exports to nine nations—Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and Maldives—increased by 3.26% to $3.42 billion in the seven months from July, compared to $3.31 billion of last year during the same months, based on State Bank of Pakistan data.
Simultaneously, imports also grew sharply by 23.65%, reaching $11.887 billion from $9.613 billion in the earlier year.
China and India: The Prime Contributors
China’s imports, the highest component of regional imports, rose by 23.69% to $11.582 billion in FY25, compared to $9.363 billion in FY24. Imports from China had grown by almost 40% in FY24 already.
Still, Pakistan’s exports to China dipped by 12.36%, down from $2.143 billion in FY24 to $1.878 billion in FY25.
Pakistan’s imports from India also witnessed a growth of 12.72%, climbing to $176.31 million in FY25, up from $156.42 million for the previous year. Conversely, exports to India were low and dipped sharply from $1.23 million in FY24 to merely $0.41 million in FY25.
Growth in Exports to Afghanistan and Bangladesh
Exports to Afghanistan increased by 64.48%, reaching $623.28 million in FY25 compared to $378.92 million in the previous year. Imports from Afghanistan also increased significantly by 212%, from $6.44 million to $20.13 million, partly due to the disruption caused by the closure of the Torkham border.
Afghanistan is still a key market for Pakistani sugar, and more than 700,000 tonnes of sugar have been exported to the country in the last four months.
Exports to Bangladesh also recorded a sharp increase of 25%, standing at $602.83 million in FY25, from $482.25 million a year ago. Imports from Bangladesh, on the other hand, rose even more steeply, advancing by 44.53% to $62.86 million from $43.49 million.
