Pakistan’s trade deficit with nine neighboring countries rose sharply by 29.42% in the fiscal year 2024–25. It reached $12.297 billion, up from $9.502 billion the previous year. This happened despite notable export growth to Afghanistan, Bangladesh, and Sri Lanka. However, rising imports—mainly from China, India, and Bangladesh—widened the overall trade gap.
Exports to these neighbors grew only 1.49%, reaching $4.401 billion. In contrast, imports jumped 20.66%, climbing from $13.838 billion to $16.698 billion. Most of this increase came from China, where imports rose 20.79% to $16.312 billion. China remains Pakistan’s largest import source in the region.
Exports to Afghanistan increased by 38.68%, while imports from Afghanistan more than doubled, rising 116.47%. Pakistan exported over 700,000 tons of sugar to Afghanistan during the year. Trade with Bangladesh also improved, with exports up 19.08% and imports rising 38.47%. Political changes in Dhaka revived trade, including rice exports from Pakistan.
Exports to China dropped 8.6%, falling to $2.476 billion. Exports to India fell sharply to $1.43 million, despite a 6.61% rise in imports from India. Imports from Sri Lanka decreased by 4.14% due to its ongoing economic problems. Trade with Iran remains largely informal, with barter trade starting to tackle smuggling issues.
Pakistan’s trade imbalance with its neighbors is growing because imports are rising faster than exports. While exports to some countries are improving, the soaring import bill—especially from China—is pushing the deficit higher. This trend needs urgent policy focus to rebalance trade and strengthen regional ties.