Pakistan’s trade ties with its counterparts are of a lot of importance for its economy. they have a significant impact on Pakistan’s growth and development.
Pakistan enjoys a very strategic location. it is located at the crossroads of South Asia, Central Asia, and the Middle East which makes it a key center for connectivity and trade within the region.
Additionally, due to its geographic location, it has access to vital land borders and maritime connections with nearby nations like China, India, and Afghanistan, all of which have large trade potential.
In this article, we will talk about the importance of trade for Pakistan and its trade ties.
Importance of international trade for Pakistan’s economy
International trade plays a crucial role in Pakistan’s economy. As it enables the nation to broaden its markets and access a greater range of goods and services, it is a crucial factor in economic growth and development. Pakistan is a resource-rich country with a highly talented workforce, and international trade affords chances to benefit from these resources and abilities.
Trade with other countries also generates foreign exchange earnings for Pakistan, which are important for its balance of payments. This is especially important given the country’s high import bills for petroleum, machinery, and other goods. Through exports, Pakistan is able to earn foreign currency, which can be used to pay for imports and service external debt.
International trade also encourages competition, creativity, and technical development. Pakistani businesses are motivated to improve their efficiency and innovation in order to compete with foreign companies, which can result in higher productivity and reduced costs. Consumers may ultimately profit from this due to cheaper costs and more options.
Pakistan’s major trading partners
While The top exporters and importers of Pakistan change from year to year, there are some countries that have consistently held the top spots. they are known as Pakistan’s major trading partners.
The major trading partners are ;
China: China has been Pakistan’s biggest commercial partner for quite some time now. according to the fiscal year 2020-2021, report China contributed about 28% of Pakistan’s total imports and 20% of its total exports. Key imports from China include Machinery, iron and steel, and chemicals whereas Pakistan mostly sends cotton, rice, and other agricultural products to China.
UAE: The UAE is yet another significant trading partner of Pakistan. It represented about 9% of Pakistan’s total imports and 10% of its total exports during the 2020–21 fiscal year. Pakistan mostly imports equipment, chemicals, and petroleum products from the United Arab Emirates while exporting textiles, grains, and fruits.
United States: Us is another prominent trading partner of Pakistan as per the data in the fiscal year 2020-21 report. the United States accounted for roughly 8% of Pakistan’s total imports and 16% of its total exports, making it a key trading partner for Pakistan. Pakistan exports textiles, leather goods, and sporting goods while mostly importing oil, machinery, and airplanes from the US.
Saudi Arabia: In the fiscal year 2020–21, Saudi Arabia accounted for almost 7% of Pakistan’s total imports and 8% of its total exports, making it a significant commercial partner. Pakistan mostly imports machinery, chemicals, and petroleum goods from Saudi Arabia while exporting mostly textiles and grains.
The UK: UK is another major trading partner of Pakistan’s trading and according to the fiscal report of 2020-2021 the United Kingdom accounted for about 5% of Pakistan’s total imports and 6% of its total exports, making it another key trading partner. While its primary exports are textiles and leather items, Pakistan mostly imports machinery, drugs, and chemicals from the UK.
