Pakistan Foreign Trade

By | April 16, 2023

According to allcitypopulation, Pakistan is a country located in South Asia. It is bordered by Afghanistan and Iran to the west, India to the east, and China to the far northeast. It has a coastline along the Arabian Sea and Gulf of Oman in the south. According to Petwithsupplies, the capital city of Pakistan is Islamabad with a population of 1,014,800 (2017). Other major cities include Karachi (14,900,000), Lahore (11,100,000), Faisalabad (3,200,000), Rawalpindi (2,100,000) (2017).

Pakistan covers an area of 881,913 square kilometers (340,509 square miles), making it one of the larger countries in South Asia. The terrain is mostly mountainous in the north and northwest with plains in the east and southwest. Its climate varies from temperate in northern areas to arid desert climate in southern areas.

The economy of Pakistan is largely dependent on agriculture, with around 21% of GDP coming from this sector. Other major contributors are services (54%) and industry (25%). Pakistan’s main exports include textiles, rice, leather goods, carpets, sports goods and surgical instruments. Its main imports include petroleum products, machinery and transport equipment.

Pakistan has a population of over 207 million people according to 2019 estimates. Over 60% of its population lives below the poverty line making it one of the poorest countries in South Asia despite its large population size. The literacy rate stands at around 58%, with education spending accounting for 2% of GDP which is relatively low compared to other countries in Asia such as India where it stands at 4%.

The government system consists of a federal parliamentary republic with executive power vested in an elected Prime Minister who serves as head of government while legislative power lies with an elected bicameral legislature consisting of National Assembly and Senate members who serve five year terms respectively.

The Pakistani rupee (PKR) is its official currency which was introduced after independence from Great Britain in 1947 replacing Indian rupees that were used prior to that time period. The current exchange rate stands at PKR 139 per US dollar as per 2020 estimates.

Pakistan’s economic growth has been volatile over time due to political instability, lack of infrastructure, poor governance, energy shortages etc. Despite these challenges, there have been some positive developments such as increased foreign direct investment, improved trade relations with China etc. The country also receives foreign aid from countries like USA, Japan etc. In order for Pakistan’s economy to grow further, there needs to be more focus on improving infrastructure, increasing foreign direct investment & improving governance structures among other things.

Pakistan Bordering Countries

Foreign Trade of Pakistan

Pakistan’s foreign trade is an important component of its economy, accounting for around 23.9% of its GDP in 2018. The country’s exports were worth US$24.8 billion in 2018 while imports were valued at US$60.2 billion, resulting in a trade deficit of US$35.4 billion.

Pakistan’s main export commodities include textiles and garments, rice, leather goods, carpets and rugs, sports goods, chemicals and pharmaceuticals, fruits and vegetables, processed food products and surgical instruments. Textiles and garments account for around 60% of the country’s total exports while rice makes up another 10%. Major export destinations include the United States (17%), United Arab Emirates (12%), China (9%), United Kingdom (6%) and Germany (5%).

The major import commodities into Pakistan include petroleum products, machinery and transport equipment, chemicals and related products, edible oil, iron & steel products as well as electronic goods. Petroleum products account for around 20% of the country’s total imports while machinery & transport equipment make up another 18%. Major sources of imports include China (24%), United Arab Emirates (14%), Saudi Arabia (11%) and the United States (7%).

The balance of trade has been negative over the last few years due to escalating import costs which have outpaced export earnings resulting in a widening trade gap. In order to improve its balance of trade situation Pakistan has implemented various policies such as increasing tariffs on imports to reduce reliance on foreign sources for essential commodities like petroleum products as well as encouraging more local production by providing incentives to domestic producers such as subsidies or tax breaks. The government has also been promoting export-oriented industries to increase its foreign exchange earnings through increased exports.

Overall, Pakistan’s foreign trade plays an important role in driving economic growth, however it faces a number of challenges such as limited access to markets due to poor infrastructure, political instability, lack of diversification in trading partners etc. In order to improve its international competitiveness, Pakistan needs to focus on improving infrastructure, increasing diversification in trading partners, reducing tariffs on imported goods & services etc.

Major Trading Partners of Pakistan

Pakistan’s major trading partners are the United States, China, and the United Arab Emirates. The United States is Pakistan’s largest export partner, accounting for almost 18% of exports in 2017. The US is also Pakistan’s second largest import partner, accounting for nearly 14% of imports in 2017. China is currently Pakistan’s largest source of imports, accounting for over 17% of all imports in 2017. The UAE is a major destination for Pakistani exports, with nearly 7% of all exports going to the UAE in 2017. Pakistan’s other major trading partners include Saudi Arabia and India, which account for 5% and 4%, respectively, of all exports in 2017. Additionally, Japan, Kuwait and Germany are major export destinations for Pakistani goods and services. Trade between Pakistan and these countries continues to grow due to strong bilateral relations between them and the favorable terms offered by Pakistan to its trading partners.

Major Imports and Exports of Pakistan

Pakistan’s major imports include machinery and transport equipment, petroleum products, edible oil, paper and paperboard, chemicals, iron and steel, plastics, and tea. Machinery and transport equipment account for the largest share of Pakistan’s imports at around 20%, followed by petroleum products at around 15%. Edible oil makes up about 10% of all imports into Pakistan while paper and paperboard account for around 8%. Chemicals make up 6% of total imports while iron and steel account for 5%. Plastics and tea each make up just under 5% of all imports.

Pakistan’s major exports include textiles (including cotton yarn/fabrics), rice, leather products, sports goods, carpets/rugs, surgical instruments, fruits/vegetables and seafood. Textiles are the largest export from Pakistan accounting for almost 40% of total exports. Rice is the second largest export item with a 12% share followed by leather products with an 8% share. Sports goods make up 6%, carpets/rugs 5%, surgical instruments 4%, fruits/vegetables 3%, and seafood 2%. The rest of Pakistan’s exports consists mostly of miscellaneous items such as chemicals, spices etc.