Trade disruptions, Afghanistan border closure and Iran-related sanctions expose vulnerabilities in Pakistan’s export strategy; rice exports rise 46pc while ASEAN shipments more than double
ISLAMABAD: Pakistan has an estimated $5.9 billion in untapped export potential across 20 product categories, but regional conflicts, border closures and disruptions to traditional trade routes have already cost the country an estimated $387 million in trade between July and October, highlighting the urgent need to diversify export markets and strengthen alternative trading routes.
The contrasting figures emerged during a meeting of the National Assembly Standing Committee on Commerce on Wednesday, where lawmakers were briefed on the impact of regional instability on Pakistan’s international trade and the country’s potential to expand exports.
The briefing revealed that the suspension of trade with Afghanistan alone had reduced Pakistan’s exports by approximately $1 billion, while disruptions to transit routes had also affected shipments to Central Asian markets.
The situation has particularly affected exports of agricultural products, including kinnow and potatoes, which traditionally find markets in Afghanistan and other regional countries.
Commerce Secretary Jawad Paul told the committee, chaired by Muhammad Jawed Hanif Khan, that bilateral trade with Gulf countries and Iran had also declined following the Iran-US conflict, although trade with Gulf countries was now gradually recovering.
He said the government had closed the Gabd-Rimdan border crossing with Iran because of sanctions imposed on Tehran and concerns that Pakistani companies could face international restrictions through certain trading arrangements.
Pakistan had previously introduced an electronic form (e-form) facility to facilitate exports of kinnow, potatoes and other products to Central Asian countries through Iranian territory. The facility was intended to allow trade to continue while addressing concerns about possible sanctions against Pakistani companies.
Trade between Pakistan and Iran was continuing on a limited scale, Paul said, warning that LPG supplies from Iran could also be affected by the regional situation. He added that LPG imports had increased during July-October.
When committee chairman Hanif questioned the decision to suspend trade with Afghanistan, the commerce secretary maintained that national security considerations had taken precedence over commercial interests.
The secretary also informed the committee that trade with India had remained suspended since 2019. Hanif questioned the effectiveness of the restrictions, observing that bilateral trade was still taking place through Dubai despite the suspension.
He cited continued commercial exchanges between China and India despite political and border tensions between the two countries.
Alternative markets offer some relief
Despite the disruptions, Pakistan’s export performance showed improvement in some markets during the first four months of the current fiscal year.
Exports to ASEAN countries more than doubled during July-October, while rice exports increased by approximately 46 per cent during the same four-month period.
China accounted for more than 90 per cent of Pakistan’s sesame seed exports, reflecting the importance of individual markets in the country’s export structure.
The commerce ministry also informed the committee about efforts to diversify export destinations and develop alternative trade corridors, including routing Pakistani exports to Tajikistan through Iran.
To minimise disruptions to agricultural exports, the government was coordinating with regional airlines, including Emirates, Gulf Air and Fly Jazeera, to facilitate the transportation of perishable products by air and reduce freight and handling costs.
The committee was also informed that cargo shipping arrangements had been introduced to maintain supplies of meat and other products to Gulf countries. However, shipping and port charges had increased, adding to exporters’ costs.
The International Trade Centre has identified an estimated $5.9 billion in untapped export potential across 20 product categories, according to the briefing.
The committee stressed that this potential required targeted, sector-specific strategies to improve competitiveness, expand market access and reduce dependence on a limited number of export destinations.
Sugar imports raise questions over public money
The committee also questioned the government’s approach to importing and subsequently exporting essential commodities, particularly sugar and wheat, and sought an assessment of the financial implications for the national exchequer.
Officials informed the meeting that Pakistan had imported around 300,000 tonnes of sugar last year after domestic prices increased. Of this quantity, approximately 200,000 tonnes had been consumed, while the remaining 100,000 tonnes were available for export.
The committee chairman questioned the rationale behind importing sugar and subsequently exporting the surplus, asking how much the exercise had cost the national exchequer.
Officials from the Ministry of National Food Security and Research said sugarcane production had reached 97.28 million tonnes during the current year, while the area under cultivation had also increased. Pakistan currently has 89 operational sugar mills.
The committee directed the ministry, in coordination with relevant authorities, to submit a comprehensive report covering sugar and wheat imports and exports over the past five to seven years.
The report must include landed import costs, export realisations, subsidies, government interventions, domestic production, available stocks, consumption requirements and actual surplus quantities.
It also sought details of the policy decisions behind imports and exports of the two commodities, particularly the mechanisms used to maintain domestic price stability and protect public funds.
The committee separately pointed out discrepancies in industrial production and export figures reported by the Ministry of Industries and Production, calling for a unified data reporting mechanism to reconcile production statistics with actual export performance and available exportable surpluses.
Anti-dumping law moves forward
In another significant development, the committee recommended the Anti-Dumping Duties (Amendment) Bill, 2026, for passage by the National Assembly following clause-by-clause consideration.
The proposed legislation seeks to strengthen Pakistan’s legal framework against unfair trade practices, improve the collection and recovery of anti-dumping duties and expedite the appeals process in line with World Trade Organisation requirements.
Under the proposed amendments, the statutory period for filing appeals before the Anti-Dumping Appellate Tribunal would be reduced from 45 to 30 days. The amendments also provide for exclusive appellate jurisdiction of the Islamabad High Court.
The proposed changes include revised provisions for provisional measures, financial security requirements and recovery of anti-dumping duties under the Customs Act.
Officials said exporters that failed to cooperate with investigations or provide the required information would face duty rates calculated on the same basis as those applied to cooperating exporters, addressing an existing disparity under which non-cooperating exporters could receive comparatively lower rates.
The committee also considered the Trade Organizations (Third Amendment) Bill, 2026, moved by Dr Farooq Sattar, concerning the organisational structure and status of chambers of commerce, particularly the Karachi Chamber of Commerce.
It reiterated that chambers should be organised on a divisional rather than individual district basis and referred the bill to the National Assembly Secretariat’s Legislative Drafting Branch for technical refinement before its return to the committee.
