Pakistan’s trade deficit with nine of its neighboring countries expanded significantly by 30.18 percent, reaching a total of 12.718 billion dollars during the first ten months of the fiscal year 2025-26. This stark increase stands in contrast to the 9.769 billion dollars recorded during the exact same period of the previous fiscal year. The rapidly expanding imbalance highlights a noticeable contraction in outbound shipments toward regional markets, heavily driven by fewer deliveries to China, followed by shrinking trade volumes with Afghanistan and Bangladesh. Conversely, the import side saw a substantial acceleration in goods arriving from China, which acted as the primary driver behind the widening trade gap.
This upward trajectory in the regional trade gap is a continuation of a pattern observed during the full fiscal year 2025, when the deficit with this exact same group of nations grew by 29.42 percent to reach 12.297 billion dollars, up from 9.502 billion dollars the year before. While exports to India showed a minor increase in percentage terms, the actual movement remained entirely negligible when calculated in total dollar value. Meanwhile, shipments outbound to both Bangladesh and Sri Lanka suffered clear pullbacks, according to the newest financial datasets compiled by the State Bank of Pakistan.
The aggregate value of exports to the group of nine nations, which includes Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives, fell by 11.28 percent to finish at 3.333 billion dollars between July and April of the current fiscal year, down from 3.761 billion dollars during the same months last year. This performance reverses the modest progress recorded in the fiscal year 2025, when regional outbound shipments managed a tiny 1.49 percent increase to hit 4.401 billion dollars compared to 4.336 billion dollars in the preceding twelve months. Running completely counter to this export drop, total inbound shipments from these neighbors climbed by 18.63 percent year-on-year to stand at 16.05 billion dollars during the ten-month timeframe.
Looking closely at country-specific data, imports originating from China expanded by 19.89 percent to reach 15.815 billion dollars during the first ten months of the fiscal year, up from 13.191 billion dollars during the same stretch of the previous year. This reinforces China’s position as the dominant source of regional imports, a trend visible in the fiscal year 2025 when Chinese imports climbed over twenty percent to reach 16.312 billion dollars. In terms of outbound trade, Pakistani exports to China managed a positive bump of 7.19 percent, rising to 2.220 billion dollars from 2.071 billion dollars in the prior fiscal period.
Trade dynamics with other regional partners reflected diverse shifts. Inbound shipments from India fell by 16.65 percent to settle at 163.64 million dollars compared to 196.35 million dollars logged last year. On the other side of the ledger, outbound shipments to India hovered at a minimal 2.926 million dollars, though this was an improvement over the 0.52 million dollars recorded in the previous period. The trade relationship with Afghanistan experienced a dramatic slowdown, with exports plunging by 64.65 percent to drop from 675.83 million dollars down to 238.87 million dollars. Similarly, imports from Afghanistan plummeted by 71.54 percent to land at 6.48 million dollars against 22.77 million dollars in the previous year.
Finally, commercial exchanges with Bangladesh and Sri Lanka also faced downward pressures. Exports destined for Bangladesh pulled back by 9.83 percent to settle at 607.57 million dollars, contrasting with the previous fiscal year when shipments to the country had jumped nineteen percent to hit 787.35 million dollars. Imports from Bangladesh concurrently dropped by 16.26 percent to arrive at 57.66 million dollars down from 68.86 million dollars. Regarding Sri Lanka, outbound shipments decreased by 23.17 percent to stop at 253.63 million dollars, while inbound commodities from the island nation climbed up by 11.76 percent to reach 55.58 million dollars during the ten months under review, up from 49.73 million dollars in the prior year.
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