Pakistan’s International Trade – By: Meerab Asif
After the 11th of September, 2001 Pakistan is emerging as one of the most talked about fast changing economy in the Central Asian Region. Its ability to stand firm and resolute being an Islamic State has brought a universal recognition and appreciation of policies being pursued by the government.
In 1991, foreign exchange reserves stood at $672 Million, in 1995 there is an increase in the reserves, which are $2933 million while in the year 2000, the reserves went down to $1547 million. However, in September 2002, Pakistan’s foreign exchange reserves touched a highest figure of $7.7 Billion.
The international credit ratings of Pakistan is continuously improving, indicating greater stability and confidence by the international financial system. In a report by Transparency International, Transparency International is a global non-governmental organization (NGO) based in Berlin, Germany. It’s dedicated to combating corruption and preventing illicit practices worldwide. Founded in 1993, Transparency International operates through a network of national chapters in over 100 countries, which rated 102 nations on a score of a possible perfect 10, ranked Pakistan as 77 on perceived public sector corruption. In comparison, Bangladesh was ranked 102 while India was ranked as 71 in the same report.
International Reputation:
Pakistan’s trade balance has never been in surplus since long. However, its export trade performance from 2001 to 2023 is:
Year Exports Trade
2000 $8.44 Billion
2001 $8.84 Billion
2003 $9.63 Billion
2004 $11.51 Billion
2005 $13.83 Billion
2006 $15.94 Billion
2007 $18.79 Billion
2008 $19.33 Billion
2009 $17.34 Billion
2010 $19.26 Billion
2011 $24.81 Billion
2012 $24.74 Billion
2013 $25.13 Billion
2014 $25.05 Billion
2015 $20.77 Billion
2016 $20.45 Billion
2017 $21.89 Billion
2018 $23.66 Billion
2019 $22.97 Billion
2020 $21.47 Billion
2021 $26.78 Billion
2022 $28.96 Billion
2023 $30.56 Billion
Major Trading Partners of Pakistan:
The most common destination for the exports of Pakistan is United States ($6.47B), Germany ($2.8B), China ($2.79B), United Arab Emirates ($2.58B), and United Kingdom ($2.41B).
Who is the biggest exporter of Pakistan?
Style Textile (Pvt) Ltd topped the ranking consecutively for the fourth year, one of the only two companies with a three-digit billion-figure at 126B PKR. With 103B PKR, Interloop Limited grabbed number 2 position. Nishat Mills Limited went to third position at 93B. Artistic Milliners (Private) Limited, Gul Ahmed Textile Mills Ltd and Sooty Enterprises (Private) Limited grabbed number 4, 5 and 6 positions respectively, beating Yunus Textile Mills Limited to number 7 position. Liberty Mills Limited, Feroze1888 Mills Limited and U S Apparel & Textiles (Pvt) Ltd achieved number 8, 9 and 10 positions respectively.
The ranking is based on value of exports in million PKR & US$ from 1 July 2022 to 30 June 2023.
Pakistan has bilateral and multilateral trade agreements with many nations and international organizations. It is a member of the World Trade Organization, part of the South Asian Free Trade Area agreement and the China–Pakistan Free Trade Agreement.
Pakistan’s exports continue to be dominated by manpower export in the subcontinent, cotton textiles and apparel. Imports include petroleum and petroleum products, chemicals, fertilizer, capital goods, industrial raw materials, and consumer products.
Import Trends for 2023 in Pakistan are:
Imports into Pakistan during January, 2024 amounted to Rs. 1,337,280 million (provisional) as against Rs. 1,317,463 million in December, 2023.
Imports makeup 19% of the Pakistan’s GDP. The main imports of Pakistan are petroleum products (refined petroleum, petroleum gas, and crude oil), Edible oil, Electrical and electronic items, Machinery, Iron, Steel, Pharmaceutical, Organic Chemicals, Vehicles and Defense related products.
What are the 7 imports of Pakistan?
Imports The top imports of Pakistan are Refined Petroleum ($6.98B), Crude Petroleum ($5.23B), Petroleum Gas ($4.58B), Palm Oil ($3.8B), and Raw Cotton ($2.44B), importing mostly from China ($21B), United Arab Emirates ($5.8B), Indonesia ($4.55B), Saudi Arabia ($4.5B), and Kuwait ($3.97B).
How much Pakistan imports?
Imports in Pakistan averaged 150502.67 PKR Million from 1957 until 2024, reaching an all-time high of 1610327.00 PKR Million in June of 2022 and a record low of 96.00 PKR Million in April of 1959. (Source: Pakistan Bureau of Statistics)
Trade Agreements and Economic Partnerships in Pakistan:
Pakistan has free trade agreements with Sri Lanka, China, and Malaysia. Pakistan is also a part of the South Asian Association for Regional Cooperation (SAARC) and has preferential trade agreements with Iran, Indonesia, Turkey, and Mauritius.
What is the name of the economic agreement between Pakistan and China?
CPFTA
CPFTA means the Free Trade Agreement between the Government of the People’s Republic of China and the Government of the Islamic Republic of Pakistan.
Challenges in International Trade in Pakistan:
International trade is a cornerstone of Pakistan’s economy, driving growth, employment, and economic development. As Pakistan enters the last quarter of 2023, it faces an array of complex challenges in the realm of international trade. A few among those challenges are:
1. Global Supply Chain Disruptions:
Global supply chains continue to grapple with disruptions caused by the COVID-19 pandemic, which has led to shipping delays, port congestions, and shortages of essential raw materials. These disruptions have affected Pakistan’s imports and exports, causing delays and increased costs for businesses.
Solution: Diversification of supply sources, strategic stockpiling of critical raw materials, and investments in technology to enhance supply chain visibility and agility can help mitigate the impact of supply chain disruptions.
2. Inflationary Pressures:
Pakistan, like many countries, is facing inflationary pressures in Q4 2023. Rising commodity prices and supply chain disruptions have contributed to increasing costs, which can adversely affect the competitiveness of Pakistani exports.
Solution: Fiscal and monetary policies should aim to manage inflation while ensuring that export-oriented industries have access to affordable credit and incentives to remain competitive in international markets.
3. Infrastructure Deficiencies:
Infrastructure deficiencies, including outdated ports and transportation networks, hamper the efficiency of international trade operations in Pakistan.
Solution: Investments in modernizing and expanding infrastructure, such as ports and transport corridors, are essential to enhance the ease of doing business and reduce logistics costs.
4. Digital Transformation:
Digitalization and e-commerce have become critical in international trade. Embracing digital technologies can improve the efficiency and competitiveness of Pakistani businesses.
Solution: Encouraging the adoption of digital technologies, improving e-commerce infrastructure, and fostering a culture of innovation can drive digital transformation in international trade.
Government Initiatives to Promote International Trade:
To formalize policy directions of the country and warrant support and facilitation to the export sector, the Ministry of Commerce has prepared Strategic Trade Policy Framework (STPF) 2020-25 with special focus, among other things, on geographical and product diversification, and cost reduction.
Future Outlook of Pakistan’s International Trade:
In its latest report “Global Economic Prospects – January 2024”, the World Bank projected Pakistan’s economic growth at 1.7% for the ongoing fiscal year 2023-24 and 2.4% in FY 2024-25, an inspiring recovery from -0.2% in the previous fiscal year.
