Pakistan’s imports from India surge in FY25: How Islamabad profits from trade while sponsoring terror

Pakistan’s trade hypocrisy

India-Pakistan relations have hit a new low following the Pahalgam terror attack that claimed 26 innocent lives, exposing Pakistan’s duplicitous stance. While Islamabad continues to fuel terrorism against India, it shamelessly maintains trade ties, taking economic benefits despite its hostile actions.

According to a report by Dawn, Pakistan’s imports from India rose to $220.58 million in FY25 from $206.89 million the previous year, while exports to India held steady at $1.43 million in FY25. In FY24, exports to India had increased to $3.669 million from $0.329 million the year before.

The data shows that although total trade between the two countries grew in the current financial year, the trade deficit significantly widened in India’s favor, with Pakistan’s imports surpassing its exports by over $200 million.

Trade deficit spirals up

Pakistan's trade deficit has increased further due to rising imports from countries like India, China, and Bangladesh. While Pakistan’s exports to regional partners such as Afghanistan, Bangladesh, and Sri Lanka showed growth in FY25 (July–June), exports to other major markets, particularly China, continued to decline.

Official data reveals that total exports to nine neighboring countries - Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives - rose marginally by 1.49% to $4.401 billion in FY25, up from $4.336 billion the previous year.

Meanwhile, imports from these countries surged by 20.66%, increasing to $16.698 billion from $13.838 billion in FY24.

As a result, the trade deficit with these nine neighbors expanded by 29.42% in FY25, reaching $12.297 billion compared to $9.502 billion the previous year. In FY24, the deficit was $9.506 billion, marking a 49% rise from $6.382 billion the year before.

Despite some export gains, the overall trade imbalance with regional partners widened significantly, driven primarily by increased imports from China, India, and Bangladesh during this period.

China fuels Pakistan’s soaring trade deficit

China emerged as the primary driver of Pakistan's widening trade imbalance in FY25. Imports from China surged by 20.79%, reaching $16.312 billion compared to $13.504 billion in the previous fiscal year. This followed an even steeper rise of 39.78% in FY24, when imports grew from $9.662 billion to $13.506 billion.

In contrast, Pakistan’s exports to China declined by 8.6% in FY25, falling to $2.476 billion from $2.709 billion in FY24, further deepening the trade gap between the two countries.

The data underscores Pakistan’s increasing dependence on imports from regional economic powers such as China and India, while its exports struggle to keep pace. This growing imbalance reflects a fragile trade structure that risks worsening unless measures are taken to strengthen domestic production, expand export markets, and address trade policy challenges.