ISLAMABAD: Pakistan’s trade deficit with nine neighbouring countries widened by 30 per cent in the outgoing 2025-26, reaching $15.933 billion compared to $12.256bn in the preceding year.

The increase in the deficit reflects a contraction in Pakistan’s exports to regional markets, largely due to reduced shipments to Afghanistan, Bangladesh, Sri Lanka and other countries. Trade with Afghanistan, including exports, has remained suspended since Oct 10, 2025, further weighing on overall export performance.

On the import side, inflows from China recorded a strong increase during the period under review, contributing significantly to the widening imbalance.

Exports to India registered a marginal rise in percentage terms, though the increase remained negligible in dollar value, according to the latest data compiled by the State Bank of Pakistan.

Higher imports from China and suspension of exports to Kabul drive imbalance in FY26

In the fiscal year FY25, Pakistan’s trade deficit with the same group of neighbouring countries had expanded by 29.42pc to $12.297bn from $9.502bn a year earlier.

The value of Pakistan’s exports to nine countries, Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives, declined by 11pc to $3.953bn in FY26, compared with $4.443bn during the same period last year.

Imports from the region grew 19.1pc to $19.886bn in FY26 from $16.699bn over the corresponding period of last year. This clearly shows that imports surpassed exports many times over.

China tops the list of countries in terms of Pakistan’s exports to its neighbours, leaving other populous countries India and Bangladesh behind. Pakistan carried out its border trade with the farther neighbour Nepal, Sri Lanka, Bhutan, Bangladesh and Maldives via sea only.

Pakistan’s exports to China posted 8.4pc positive growth during FY26 to $2.684bn from $2.477bn over the last year. The bulk of the regional export share, which accounts for 68pc, is with China, while the remaining is for eight countries.

However, imports from China grew 19.8pc to $19.538bn during the year under review against $16.312bn over the last year.

The bulk of the regional imports share, which accounts for 98pc is with China, while the remaining is from eight other countries.

Pakistan’s exports to Afghanistan posted a negative growth of 68.9pc to $243.693m in FY26 from $783.945m in the same period in FY25. Imports from Afghanistan dipped 74.9pc to $6.497m in FY26 from $25.898m in FY25.

The country’s exports to India grew 104pc to $2.926m in FY26 from $1.429m in FY25. The imports from India dipped 7.6pc to $168.730m against $358.936m over the last year.

Pakistan’s exports to Bangladesh declined by 9.3pc to $715.589 m in FY26 from $788.970 m over the last year. Imports dipped 14.2pc to $67.154 m in FY26 from $78.312 m over the last year.

Exports to Sri Lanka dipped by 22.8pc to $293,376 m in FY26 from $379.822 m over the last year. The imports from Sri Lanka rose by 14.1pc to $68.151 m in FY26 from $59.731 m over the last year.

Published in Dawn, July 22nd, 2026