New Delhi, Feb 9 Pakistan's trade deficit with nine neighbouring countries widened sharply by 44.42 per cent to $7.683 billion in the first half of fiscal year 2025-2026 (July-December), compared to $5.32 billion during the same period last year, according to the latest data from the State Bank of Pakistan.
The surge in the deficit is largely attributed to a decline in exports, particularly to China, Afghanistan, and Bangladesh. Pakistan has suspended all trade with Afghanistan, including exports, since October 10, 2025, further impacting regional trade flows, according to an article in the UAE’s Gulf News newspaper.
While exports to India saw a marginal increase in percentage terms, their overall value remained negligible. Meanwhile, shipments to Bangladesh and Sri Lanka registered negative growth over the period under review, Pakistani daily Dawn News reported.
In the first half of FY26, total exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives fell 18.56 per cent to $1.965 billion, down from $2.413 billion in the same period last year. On the other hand, imports from these countries surged 24.76 per cent to $9.648 billion, compared to $7.733 billion last year, the article stated.
China remains the dominant source of Pakistan’s imports, which grew 25.61 per cent to $9.472 billion, while exports to China dropped 5.59 per cent to $1.216 billion. Imports from India fell 12.73 per cent to $97.734 million, with exports to India rising slightly to $2.926 million from $0.399 million in the same period last year, the article added.
Exports to Afghanistan registered a sharp 56.61 per cent decline to $219.489 million, while imports fell 36.75 per cent to $6.321 million. Bangladesh-bound exports dipped 7.54 per cent to $358.499 million, and Sri Lanka saw a 27.13 per cent drop in exports to $163.173 million, even as imports from both countries rose.
The widening trade gap follows a similar trend from FY25, when the deficit with these neighbours expanded 29.42 per cent to $12.297 billion from $9.502 billion the previous year, highlighting ongoing challenges for Pakistan’s regional trade balance, the article added.
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