ISLAMABAD - Pakistan must diversify its export base and markets through proactive policies, better infrastructure and innovation to avoid recurring trade deficits.
“Pakistan’s exports have been dominated by textiles, accounting for nearly 60% of total exports. While textiles have long been the backbone of Pakistan’s trade, this over-reliance has constrained growth in other sectors. Moreover, much of Pakistan’s export trade is concentrated in just a few markets, notably the US, the European Union and China,” said Majid Shabbir, Policy Adviser at Islamabad Chamber of Commerce and Industry (ICCI).
“The problem with concentrating on textiles is that it is an increasingly competitive global market, with countries like Bangladesh and Vietnam rapidly overtaking Pakistan. Pakistan’s textile sector relies heavily on importing raw cotton and machinery. This dependency increases production costs, making it hard for the country to compete on price,” he pointed out.
He said that Pakistan needs diversification into sectors such as pharmaceuticals, engineering goods, information technology, and agriculture-based products. “These sectors are seen as untapped opportunities that could help Pakistan reduce its vulnerability to market fluctuations.”
Shabbir emphasised the need for a policy shift, stating, “Pakistan has the potential to become a hub for IT services and software exports, but this requires substantial investment in infrastructure, skilled workforce and better regulatory frameworks.”
“Pakistan has a well-developed domestic pharmaceutical industry, but it remains largely inward-focused, catering to the local market. Expanding pharmaceutical exports could be a lucrative option, especially given the global demand for affordable healthcare products,” he said, stressing the importance of regulatory reforms, adherence to international standards, and enhanced research and development capacity.
Talking to WealthPK, Umar Khalid, assistant chief of Industries & Commerce Section, Ministry of Planning, Development and Special Initiatives, said for too long Pakistan has relied on a few major markets, thus missing out on opportunities to diversify and stabilise its export base.
He stated that expanding into African markets, for instance, offers immense potential, as these economies are growing and increasingly integrate into the global economy. “Similarly, Central Asia offers geographical proximity and demand for products like agriculture machinery, processed food and construction materials.”
Furthermore, Khalid said that CPEC is positioned to play a pivotal role in revitalising Pakistan’s industrial sector and addressing the stagnation in exports by offering incentives through special economic zones and infrastructure investments.