Exports to region down 24.4pc in Q1

ISLAMABAD: Pakistan’s exports to the region in the first quarter of current fiscal year declined 24.4 per cent from an year ago due to the impact of Covid-19.

Exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives fell to $719.198 million in 1QFY21, from $951.01m the previous year, according to the latest data compiled by the State Bank of Pakistan.

Meanwhile, the country’s trade deficit with the region narrowed during the period under review as imports from these countries also dipped.

Exports to Afghanistan have been on a steady decline for the last few years owing to souring relations with Kabul and several border closures. Pakistan’s exports to the north-western neighbour fell 13.98pc to $209.88m in the 1QFY21 from $243.98m in the corresponding period of FY20.

A few years ago, Afghanistan was the second major export destination after the United States.

Pakistan’s exports to China also dipped by 24.94pc to $329.42m in first quarter of current fiscal year from $438.91m over the corresponding months of last year. Exports to China also declined by 10.5pc to $1.663 billion in FY20, from $1.858bn the previous year.

The decline in export proceeds was noted even though Ministry of Commerce claims to have brokered preferential market access for local products under the second phase of the free trade agreement with Beijing.

The country’s exports to India fell by an 89.44pc to $1.035m this year as against $9.802m over the last year. In FY20, exports to India plunged by a whopping 90.8pc to $28.644m in FY20, from $311.958m over FY19. The government suspended trade relations with New Delhi last year. However, the Ministry of Commerce has yet to clarify on exports to India during the current fiscal year despite the suspension.

The government has allowed imports of raw materials from the eastern neighbour for pharmaceuticals despite the suspension of trade relations with New Delhi.

Export proceeds to Iran and Bhutan came in at zero. No export proceeds were recorded to these countries in the first quarter. Most of the trade with Iran is carried out through an informal channels on border areas.

Exports to Bangladesh decreased to $127.499m in FY21 from $180.958m, indicating a fall of 29.54pc. Islamabad has recently reached out to Dhaka to revive talks to facilitate trade between the two countries.

Similarly, exports to Sri Lanka dipped by 30.15pc to $49.111m in FY21 from $70.317m in the previous year. Islamabad has signed the first-ever FTA with the country but trade between the two remains far behind its true potential.

On the other hand, export proceeds to Nepal plunged by 78.7pc as they reached $1.177m in first quarter of FY21, from $5.527m the previous year while those to Maldives dipped by 24.19pc to $1.087m from $1.434m.