ISLAMABAD: Pakistan’s trade deficit with nine neighbouring countries widened by 32.82 per cent to $11.17 billion during the first 11 months of the current fiscal year (FY25), up from $8.41bn in the same period a year earlier, official data showed.
While exports to Afghanistan, Bangladesh and Sri Lanka recorded notable growth — buoyed in part by changing political dynamics in the region — the overall trade gap continued to expand due to surging imports, particularly from China, India and Bangladesh.
The most concerning trend for policymakers remains the sustained decline in exports to China, Pakistan’s largest trading partner in the region, despite imports from the country surging. This has further deepened the bilateral trade imbalance, with similar patterns observed in trade with India and Bangladesh.
In FY24, Pakistan’s trade deficit with these nine neighbours stood at $9.506bn, reflecting a 49pc increase from $6.382bn in FY23.
Surge in imports from China, India deepens regional trade imbalance
According to data compiled by the State Bank of Pakistan, exports to the region in July-May FY25 edged up 0.98pc to $4.085bn from $4.045bn in the same period last year. In contrast, imports jumped 22.52pc to $15.255bn from $12.451bn a year ago.
A deeper analysis reveals that imports from China surged 22.59pc to $14.890bn in July-May FY25 from $12.146bn. In FY24, imports from China had already risen 39.78pc to $13.506bn from $9.662bn the previous year. China accounts for the bulk of Pakistan’s regional imports, followed by India and Bangladesh.
Exports to China, however, fell 11.18pc to $2.270bn in the first 11 months of FY25, down from $2.556bn in the same period last year.
Imports from India rose 11.82pc to $211.42m during July-May FY25, compared to $189.07m a year earlier. In FY24, these imports totalled $206.89m, up from $190.04m in FY23. Meanwhile, exports to India remained negligible at $0.51m in 11MFY25, compared to $3.43m last year. In FY24, Pakistan’s exports to India stood at $3.669m, having risen sharply from $0.329m in the preceding year.
Exports to Afghanistan grew significantly by 41.39pc to $723.44m, up from $511.63m in the previous year. Imports from Afghanistan also increased sharply by 142pc to $24.72m from $10.18m. Pakistan’s main export to Afghanistan during FY25 was sugar, with over 700,000 tonnes exported over the past four months alone.
Exports to Bangladesh rose by 21.45pc to $728.31m from $599.65m. Imports from Bangladesh climbed 41.95pc to $73.55m from $51.67m. This boost in trade followed political upheaval in Dhaka and the resumption of rice exports to Bangladesh. Exports to Sri Lanka declined slightly by 3.02pc to $352.37m, compared to $363.36m last year. The drop was attributed to recessionary pressures in Sri Lanka. Imports from the island nation remained unchanged at $54m.
Published in Dawn, June 25th, 2025
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