Pakistan’s trade deficit with its nine neighboring countries surged to $1.117 billion during the first 11 months of the 2025 fiscal year. The rise is mainly due to a sharp increase in imports from China, India, and Bangladesh, while exports to these countries fell. This imbalance has caused concern among policymakers and economists alike.
Although exports to Afghanistan, Bangladesh, and Sri Lanka showed notable growth due to changing political conditions, the overall deficit widened because imports from China, India, and Bangladesh increased significantly. China remains Pakistan’s largest import source in the region, but exports to China dropped by over 11 percent.
Trade with India and Bangladesh also showed similar patterns. Imports from India increased by nearly 12 percent, reaching $211 million, while exports to India stayed minimal. Bangladesh saw a rise in exports by 21 percent and imports by over 40 percent, mainly due to resumed rice exports after political tensions eased.
Exports to Afghanistan grew by over 41 percent, with sugar as the major export product, especially in recent months. Meanwhile, Sri Lanka witnessed a slight decline in exports, affected by its ongoing economic crisis. Imports from Sri Lanka remained steady.
Overall, Pakistan’s growing import bills with these neighbors, especially China and India, outweigh gains in exports. This widening trade gap highlights the need for policies to boost exports and manage imports better for a balanced regional trade.