LAHORE: Pakistan’s share of global merchandise trade has been on a steady decline for more than two decades. In 1999, the country managed about 0.21 per cent of world exports. By 2023, that share has slipped further to around 0.12 percent, significantly lower than that of its regional peers.
India has more than doubled its share to nearly 1.8 per cent, while Bangladesh has become the world’s second-largest apparel exporter, holding about 6.9 per cent of the global garment market.
Over half of Pakistan’s exports come from textiles, leaving the country vulnerable to market fluctuations and price pressures. Leather, rice and a handful of other commodities make up most of the rest, creating a high concentration risk. Comparatively, India and Bangladesh have invested heavily in diversification: India in pharmaceuticals, IT services, engineering goods, and auto-parts; Bangladesh in upgrading and scaling its garment industry.
Pakistan’s export markets remain heavily concentrated, with nearly half going to the United States and the EU. While trade with China has grown, this dependence has not translated into higher-value export growth. Countries like India diversified their markets early, building strong trade ties with China, ASEAN and Africa.
Nations that began with textiles — Japan, China and India — eventually shifted to high-value products. Pakistan has yet to make that leap. Energy shortages, poor infrastructure and weak trade facilitation systems are significant hurdles. Analysts argue that successive governments’ focus on free trade agreements without capacity-building has delivered limited gains.
Pakistan’s educated, English-speaking workforce provides a foundation for IT and services exports. Despite this, IT exports remain underdeveloped. With proper infrastructure and government incentives, experts believe Pakistan could rival India’s IT growth trajectory within a decade.
One positive trend is the surge in agricultural exports, which grew nearly 37 per cent in FY2023-24, jumping from $5.8 billion to $8 billion. This growth demonstrates that with targeted support and policy focus, sectors outside textiles can significantly contribute to foreign exchange earnings.
Pakistan’s export strategy often sets ambitious targets without clear plans to achieve them. For FY2009-10, planners set a 6.0 per cent higher export target despite recession and severe energy shortages, while India, with a stronger economy, maintained its targets at prior levels in response to global conditions. Such mismatches reflect a lack of pragmatic planning.
Bangladesh’s rise underscores the power of a single-minded focus on quality, compliance, and scaling capacity in a single sector, while India’s diversified base shows the importance of broad industrial policy. Both countries leveraged trade corridors, infrastructure investments, and export-friendly policies to integrate into global supply chains.
To move ahead Pakistan must diversify both products and market. It should shift from textiles to engineering goods, electronics, pharmaceuticals, and creative industries. Exporters must be encouraged to invest in branding, design and innovation to move up the value chain. In infrastructure development planners must prioritise reliable energy, logistics and customs efficiency to reduce export costs. To boost regional trade there is a need to strengthen ties with China, Iran, and Central Asia instead of over-focusing on politically sensitive markets. We must position IT, BPO, and creative services as key growth sectors. And set realistic targets backed by investment in export enablers, skill development and technology adoption.
Pakistan’s decline in global trade share is not inevitable. The country has human capital, geographical advantages, and sectoral potential, but a strategic, consistent approach is needed. Without bold reforms, Pakistan risks falling further behind peers who are steadily capturing larger portions of global trade.
