KARACHI: The business community on Tuesday expressed concern over the sharp expansion in Pakistan’s trade deficit, which has surged by 20 per cent to reach $32 billion during the first 10 months of the current fiscal year (July-April FY26).
Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), in an urgent appeal to policymakers, emphasised that the only sustainable way to stabilise the country’s fragile external account and protect foreign exchange reserves is a comprehensive and fast-tracked strategy to incentivise export sectors.
Analysing the latest figures released by the Pakistan Bureau of Statistics (PBS), the FPCCI chief highlighted the widening gap between exports and imports. During July-April FY26, Pakistan’s import bill rose by nearly 7.0 per cent to $57.19 billion. In contrast, total export proceeds over the same period declined by 6.25 per cent to $25.21 billion, down from $26.89 billion in the corresponding period last year.
Sheikh said the disparity means the country is importing more than twice the value of its exports, pushing the cumulative trade deficit up from $26.59 billion a year earlier. The business community’s concerns were further heightened by April’s data, which recorded a 46-month high monthly trade deficit of $4.07 billion. Although exports rose by 14.03 per cent year-on-year (YoY) in April to $2.48 billion, the increase was outweighed by a surge in imports.
Saquib Fayyaz Magoon, senior vice president of the FPCCI, said monthly imports grew by 7.46 per cent YoY and 28.41 per cent month-on-month (MoM), reaching $6.55 billion. He added that these figures suggest that temporary import compression measures have been ineffective and that structural weaknesses in exports must be addressed.
Magoon noted that there was some relief from the services sector, where the trade deficit narrowed by 6.7 per cent to $2.15 billion during July-March FY26, supported by a 17 per cent rise in services exports to $7.35 billion. However, he stressed that merchandise exports remain the backbone of the economy. Traditional manufacturing and textile sectors, he said, cannot compete globally while facing high energy tariffs, tight monetary policy and a deteriorating business environment.
Muhammad Ikram Rajput, president of the Korangi Association of Trade and Industry (KATI), also warned of the risks posed by the widening deficit. He said the continued rise in imports alongside weak export growth could put further pressure on foreign exchange reserves and the rupee.
Rajput noted that while exports have shown some improvement, the sharp increase in imports has offset these gains, worsening the overall trade balance. He urged the government to adopt comprehensive policies to boost exports while curbing non-essential imports.
He proposed higher duties on luxury and non-essential goods, along with restrictions on avoidable imports, to limit the outflow of foreign exchange. Such measures, he said, would also support domestic industry.
Highlighting challenges faced by manufacturers, Rajput said sustained export growth would not be possible without addressing high energy costs, raw material shortages and the rising cost of doing business.
He called for targeted incentives for export-oriented industries, improved access to new international markets and greater focus on enhancing domestic production to reduce reliance on imports and stabilise the trade balance.
Rajput also urged the government and relevant institutions to develop a coordinated strategy in consultation with industry stakeholders to address economic challenges and ensure sustainable growth.
