According to data gathered by the State Bank of Pakistan, Pakistan's exports to nine regional nations fell by 21.1% in FY23, mostly due to a decline in shipments to China. The reduction was not just in exports; imports, particularly those from China, also experienced a significant drop during FY23.
The import containers were awaiting approval as part of government effort to reduce the trade imbalance amid rapidly declining foreign exchange reserves, and the State Bank of Pakistan gave issuing letters of credit for consumer products the lowest priority in FY23.
Only 12% of the nation's total $27.73 billion in exports in FY23 went to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives, totaling $3.331 billion. China accounts for 60% of Pakistan's regional export share, with the remaining 40% going to the other eight nations.
Exports to China decreased 27.3 percent from $2.78 billion in FY22 to $2.02 billion in FY23. It was the first drop since the end of the Covid era. However, imports also fell by 44.1 percent, from $17.30 billion in FY23 to $9.66 billion. Exports from Pakistan to Afghanistan had a decline of 9.97% to $521.99 million in FY23 from $552.78 million in FY22.
Afghanistan used to be Pakistan's second-largest export market behind the United States until a few years ago. The export data did not reflect money that was received via land means. On the official route, Pakistan's exports to Iran remained at $0.028 million in FY23 compared to zero exports the previous year.
In border regions, informal routes are used for the majority of commerce with Tehran. Iran and Pakistan engaged in barter trading.
Exports to India fell by 74.53 percent, from $1.292 million in FY22 to $0.329 million in FY23. From $872.56 million in FY22 to $768.54 million in FY23, exports to Bangladesh declined by 11.92 percent.