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Issue

Export Slump and Widening Trade Deficit

Dossier mark: Worsening
Type
Trade & economy
Impact on US–Pakistan ties
Significant
Status
Worsening

Overview

Pakistan's goods exports fell 5.9% to about $30.1 billion in FY2026 while imports rose 8.1%, widening the trade deficit to $39.6 billion. Textiles stagnated at about $17.9 billion, and rice exports fell sharply amid cheaper Indian competition, high financing costs and Afghan border closures.

Latest updates

Official data showed FY2026 exports of $30.14 billion and a trade deficit of $39.62 billion

Exporters reported cheaper Indian rice and an Afghan border closure costing about $1.1 billion in losses

Rice exports fell 28% in the first quarter of FY2026 amid policy hurdles and weaker competitiveness

Recent developments

Weak exports leave Pakistan dependent on remittances, rollovers and IMF support, and raise the stakes of US tariff rates and EU GSP+ status. The United States is the largest single market for Pakistani goods, so US trade terms weigh heavily on any recovery.

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