By Moaaz Manzoor

Pakistan’s exports increased from $21.4 billion in FY20 to $32.0 billion by FY25, reflecting a positive trajectory in recent years, according to a document available with Wealth Pakistan.

However, long-term growth remains modest compared to regional peers. Over the 2005–2025 period, Pakistan recorded a compound annual growth rate (CAGR) of 3%, significantly below Vietnam at 14%, Bangladesh at 9%, and India at 8%.

Comparative data shows Pakistan’s exports rising from $16 billion in CY2005 to $31 billion in CY2025. Exports reached $32 billion in CY2024 before easing slightly to $31 billion in CY2025.

In contrast, Vietnam’s exports expanded from $32 billion in CY2005 to $444 billion in CY2025. India’s exports increased from $100 billion to $475 billion over the same period, while Bangladesh’s exports rose from $12 billion to $55 billion.

The chart further indicates Pakistan’s exports at $29 billion in CY2021, $31 billion in CY2022, $29 billion in CY2023, $32 billion in CY2024, and $31 billion in CY2025, highlighting fluctuations in recent years.

The document identifies several structural constraints that have limited export acceleration. These include high energy and input costs, a narrow export base with heavy reliance on a few products, low levels of value addition, limited integration into global value chains, exchange rate volatility, and limited access to finance for exporters.

Additional bottlenecks cited include high logistics and trade facilitation costs, policy unpredictability and frequent regulatory changes, weak compliance capacity with international standards, particularly among SMEs, low foreign direct investment (FDI) inflows into export-oriented sectors, and gaps in skills and technology.

External pressures have also weighed on performance, including recurring global economic shocks, macroeconomic volatility affecting capital flows and investor confidence, low regional and global trade integration, and rising trade protectionism.

On the policy front, the government has shifted from annual trade policies to five-year Strategic Trade Policy Frameworks under a Whole-of-Government Approach led by the National Economic Development Board (NEDB).

Targeted initiatives include duty drawback schemes, sector-specific support for textiles, leather, rice and sports goods, market access efforts through GSP+, free trade agreements (FTAs) and preferential trade agreements (PTAs), SME export readiness programmes, tariff rationalisation, diversification and national brand development, enhanced regional connectivity with Central Asian Republics (CARs), an expanded role of trade missions, and the establishment of Sectoral Councils.

Recent cost-reduction measures include the Tariff Policy 2025–30, which reduced tariffs on raw materials and intermediary goods, abolished additional customs duties (ACDs) and regulatory duties (RDs) while introducing four tariff slabs, and passed benefits of over Rs120 billion to industry.

Electricity tariff measures include a subsidised incremental tariff of Rs22.98 per unit for three years, a reduction of Rs4.04 per unit in industrial tariffs, and wheeling charges capped below Rs9 per unit. The 0.25% Export Development Surcharge (EDS) was abolished in December 2025.

Access to finance measures include a reduction in the policy rate from 22% to 10.5%, enhancement of the Export Finance Scheme (EFS) limit from Rs770 billion to Rs1 trillion, concessional loans under EFS at 4.5% (reduced from 7.5%), and allocation of Rs15 billion for FY2025-26 to clear pending DLTLL claims.

Prime Minister’s Working Groups formed in 2025 cover export development, industrialisation, income tax, energy, agriculture, information technology, ports, customs and railways. Dedicated committees have also been constituted on the Export Facilitation Scheme (EFS), valuable goods and gemstone exports, and contract enforcement.

Despite multiple policy interventions, the comparative data over two decades underscores that Pakistan’s 3% CAGR continues to trail significantly behind regional competitors.

Credit: INP-WealthPk