Pakistan’s trade deficit with nine neighboring countries rose sharply by 43.22% to reach $5.328 billion in the first half of fiscal year 2025 (1HFY25), compared to $3.72 billion in the same period last year, according to data from the Bank Pakistani state. SBP).
The widening trade gap is primarily due to a significant increase in imports from China, India and Bangladesh, while exports to China have seen a decline.
During the six-month period, Pakistan’s total exports to these nine countries – Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and Maldives – rose by 7.85% to $2.404 billion, compared to $2.229 billion in the first half. FY24. However, this growth was outweighed by a sharp rise in imports, which jumped by 29.97% to $7.732 billion, compared to $5.949 billion during the same period last year.
Imports from China rose by 30.42% to $7.541 billion in the first half of fiscal year 2025, compared to $5.782 billion in the corresponding period last year. China remains the largest trading partner in the region, with Pakistan getting the bulk of its imports from there, followed by India and Bangladesh.
Despite the overall rise in exports, Pakistani shipments to China witnessed a decline. Conversely, exports to Afghanistan, Bangladesh and Sri Lanka registered modest growth, offsetting some of the losses resulting from lower exports to China.
In FY24, the trade deficit with these nine countries reached $9.506 billion, representing a 49% increase from $6.382 billion in FY23. In the first half of FY25, exports accounted for only 14.51% of the total trade volume. Pakistan with regional partners, reflecting the country’s limited penetration in regional markets.
Pakistan’s total exports during the first half of FY25 were $16.56 billion, an increase of 10.52% from $14.98 billion in the same period last year. However, the imbalance with regional trading partners highlights the challenges of diversifying trade and reducing dependence on imports, especially from China.