Pakistan’s trade with India is rising, while its exports to China on decline

Despite recent military tensions straining bilateral relations, trade between India and Pakistan has shown unexpected resilience. According to figures from the State Bank of Pakistan, imports from India surged to $220.58 million in FY25, up from $206.89 million in FY24—a 6.62% increase over the previous year’s $190.04 million.

On the other hand, Pakistan’s exports to India remained relatively low, holding steady at $1.43 million in FY25. This marks a sharp drop from FY24, when exports rose dramatically to $3.669 million, compared to just $0.329 million the year before.

While trade between India and Pakistan expanded in FY25, the imbalance also deepened—Pakistan’s imports from India exceeded exports by over $200 million. More broadly, Pakistan’s trade deficit with nine neighbouring countries ballooned by 29.42%, reaching $12.297 billion in FY25, up from $9.502 billion the previous year.

In comparison, FY24 had already seen a steep rise in the deficit, which grew by 49%, from $6.382 billion in FY23 to $9.506 billion. Despite modest export gains, Pakistan’s overall trade deficit with its regional partners grew significantly in FY25—driven largely by increased imports from China, India, and Bangladesh. While exports to Afghanistan, Bangladesh, and Sri Lanka showed robust growth, shipments to other countries, especially China, continued to decline.

Pakistan’s total exports to nine neighboring countries—Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives—inched up by 1.49%, reaching $4.401 billion in July–June FY25, up from $4.336 billion the previous year. However, imports from these nations surged by 20.66%, climbing to $16.698 billion in FY25, compared to $13.838 billion the year before—further widening the trade gap.

In FY25, Pakistan’s imports from China surged by 20.79%, reaching $16.312 billion, up from $13.504 billion in the previous fiscal year. Notably, FY24 had already seen a sharp spike of 39.78%, with imports rising from $9.662 billion to $13.506 billion. China continues to dominate Pakistan’s regional imports, outpacing contributions from India and Bangladesh.

On the export front, however, Pakistan’s shipments to China declined by 8.6%, falling to $2.476 billion in FY25 from $2.709 billion a year earlier—deepening the trade imbalance.