In a significant shift in regional trade patterns, Pakistan is importing more goods from India while witnessing a sharp decline in its exports to China — two trends that could reshape its economic and diplomatic landscape. This evolving trade behavior is not just a matter of numbers; it reflects deeper economic compulsions, shifting geopolitical strategies, and growing market dependencies.
The Numbers Tell a Story
According to recent trade data, Pakistan’s imports from India have quietly increased over the past year, despite long-standing diplomatic tensions and limited formal trade ties since 2019. Key imports include pharmaceuticals, cotton, machinery parts, and chemicals — all vital to Pakistan’s struggling manufacturing and healthcare sectors.
At the same time, Pakistan’s exports to China — its largest trading partner in recent years — have seen a notable decline, especially in key sectors like textiles, seafood, and minerals. Supply chain disruptions, stricter Chinese regulations, and a cooling Chinese economy have contributed to this trend.
Why the Shift Toward Indian Goods?
Economic Necessity Over Politics:
Pakistan’s ongoing economic crisis, marked by high inflation and a depreciating rupee, has forced it to look for cost-effective and logistically accessible trade partners. Indian products, especially raw materials and essential goods, offer affordability and quick delivery.
Backdoor Trade Channels:
Even without full diplomatic normalization, trade continues through third-party countries like the UAE and Singapore. This indirect trade mechanism has helped Pakistani businesses get access to Indian goods without an official reopening of trade.
Pressure from Domestic Industries:
Pakistani manufacturers have long demanded the resumption of trade with India, especially for raw materials like cotton and medicine, which are either too expensive or unavailable from other sources.
The China Conundrum
China remains Pakistan’s top investor and a strategic ally through the China-Pakistan Economic Corridor (CPEC), but recent trade numbers show worrying signs:
Declining Demand: China’s slowing economy and a shift toward domestic production have reduced imports from countries like Pakistan.
Increased Competition: Chinese buyers now have access to cheaper or higher-quality alternatives from Southeast Asia and Africa.
Export Bottlenecks: Pakistani exporters face bureaucratic and logistical hurdles, especially in complying with China’s strict quality and customs regulations.
Strategic and Diplomatic Implications
This shift in trade patterns comes at a sensitive time for Pakistan. The country is balancing its traditional reliance on China with the practical benefits of Indian imports. The question is whether Islamabad can continue this economic maneuvering without reopening formal trade channels with New Delhi.
There are also diplomatic consequences:
China might press Pakistan to offer greater concessions under CPEC or seek assurances about long-term trade cooperation.
India, despite no formal trade normalization, could quietly benefit from the demand across the border, allowing economic pragmatism to override political friction.
Regional Impact
This trend could impact broader South Asian trade policy:
Revival of SAARC trade dialogue: If Pakistan’s dependence on Indian goods grows, it could push regional blocs to rethink trade routes and tariffs.
Opportunities for other neighbors: Bangladesh, Nepal, and Sri Lanka may see new openings in the Pakistani market as it diversifies away from China.
India’s influence rises: Quietly, India may gain more economic leverage in the region — not through diplomacy, but through trade pragmatism.
