Pakistan’s trade deficit with key regional partners increased sharply in the first seven months of fiscal year 2025, rising to 26, raising concerns about export performance and the regional trade balance.
According to recent data reported by local media, Pakistan’s trade gap with nine neighbouring countries reached 9.001 billion dollars during July to January FY26. This shows a 41.37 percent rise compared to 6.367 billion dollars in the same period last year.
Exports to these regional markets declined by 16.86 percent to 2.307 billion dollars. At the same time, imports from these countries increased, which widened the overall deficit. The countries included in this group are Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives.
| Indicator | July–Jan FY25 | July–Jan FY26 | Change |
|---|---|---|---|
| Trade Deficit | 6.367 bn USD | 9.001 bn USD | +41.37% |
| Exports | 2.775 bn USD | 2.307 bn USD | -16.86% |
Economists say the widening deficit reflects weak export growth and strong dependence on imported goods, especially from China. Pakistan’s export base remains narrow, mostly relying on textiles, rice, and a few other products.
Trade experts stress the need to improve regional connectivity, reduce trade barriers, and diversify exports.
Without structural reforms and better market access, Pakistan may continue to face pressure on its external account in the coming months.