Trade Gap with Neighbors Widens 29% in FY25
Pakistan’s Trade deficit Widens Sharply Amidst soaring Imports from China, India, and Bangladesh
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Islamabad – July 23, 2025 – pakistan’s trade deficit has ballooned by a notable 49% in the fiscal year 2024-25 (FY25), reaching $9.506 billion, a stark increase from $6.382 billion in the preceding year. This widening gap is primarily attributed to a substantial surge in imports from key Asian economies, particularly China, india, and Bangladesh, according to data compiled by the State Bank of Pakistan.
while Pakistan’s exports to certain regional partners like Afghanistan, Bangladesh, and Sri Lanka have shown robust growth, a persistent decline in exports to major markets, especially China, has exacerbated the trade imbalance.
Regional Trade Dynamics: A Tale of Two trends
The overall picture of Pakistan’s trade with nine key regional countries – Afghanistan, China, Bangladesh, Sri Lanka, india, Iran, Nepal, Bhutan, and the Maldives – presents a mixed bag. in the period of July-June FY25,exports to these nations saw a modest increase of 1.49%,amounting to $4.401 billion, up from $4.336 billion in the same period last year.
However, this export growth was overshadowed by a dramatic surge in imports, which escalated by 20.66% to $16.698 billion in FY25,compared to $13.838 billion in the previous fiscal year. This imbalance highlights a critical challenge for Pakistan’s economy as it navigates global trade currents.
China: The Dominant Importer, A Declining Export market
China continues to be the largest source of Pakistan’s imports, with the value of goods imported from the East Asian giant soaring by 20.79% to $16.312 billion in FY25, up from $13.504 billion in the corresponding period last year. This follows a substantial 39.78% increase in imports from China in FY24,which totalled $13.506 billion. The data indicates that china accounts for the lion’s share of imports within the region, with India and Bangladesh contributing smaller, yet growing, portions.
Conversely,Pakistan’s export performance to China has faltered,registering a decline of 8.6% to $2.476 billion in FY25, down from $2.709 billion in the preceding fiscal year. This trend underscores a growing concern for Pakistani exporters seeking to penetrate the lucrative Chinese market.
India and Bangladesh: Growing Trade Ties, Mixed Export Fortunes
Trade with India has also seen an uptick in imports, which increased by an unspecified percentage to $220.58 million in FY25 from $206.89 million in the previous year. In FY24, imports from India had already risen by 6.62% to $206.89 million. Meanwhile, Pakistan’s exports to India remained negligible, standing at $1.43 million in FY25, a decrease from $3.669 million in FY24.
Bangladesh,on the other hand,has emerged as a stronger export destination for Pakistan. Exports to Bangladesh surged by 19.08% to $787.35 million in FY25, a significant jump from $661.19 million in the prior year. This growth is partly attributed to the recent political transition in Dhaka, which has opened avenues for Pakistani rice exports. Imports from Bangladesh also saw a considerable increase of 38.47% to $78.31 million in FY25.
Afghanistan and Sri lanka: Export Growth and Economic Headwinds
Pakistan’s export landscape also includes positive developments with Afghanistan, where exports grew by a remarkable 38.68% to $773.89 million in FY25. This surge is largely driven by substantial sugar exports, with Pakistan shipping over 700,000 tonnes in the past four months, predominantly to Afghanistan. Imports from Afghanistan also saw a significant increase of 116.47% to $25.89 million.in contrast,exports to Sri Lanka experienced a downturn,dropping by