Pakistan’s exports declined by more than $1.2 billion during fiscal year 2025-26, as rising tensions between the United States and Iran and wider instability in the Middle East affected trade, markets and key export sectors.
According to the reported figures, Pakistan’s total exports fell from around $32 billion in the previous fiscal year to $30.8 billion in 2025-26.
The decline reflects pressure on several major export categories, with rice recording the largest fall, while textiles, sugar and agricultural products also experienced declines.
Rice Exports Record Major Decline
Rice was among the sectors most severely affected during the fiscal year.
Exports of rice declined by approximately $1.02 billion, making it the largest reduction among Pakistan’s major export sectors.
The fall in rice exports contributed significantly to the overall $1.2 billion decline in the country’s export earnings.
Rice is an important component of Pakistan’s agricultural export portfolio, and weaker overseas demand and disruptions linked to regional instability can have a direct impact on farmers, traders and exporters.
Textiles, Sugar and Agriculture Also Affected
Other important export sectors also recorded declines during fiscal year 2025-26.
Textiles, sugar and agricultural products all experienced weaker export performance, adding to the pressure on Pakistan’s overall trade figures.
The textile sector remains particularly important to Pakistan’s export economy, while agricultural products and sugar also contribute to foreign exchange earnings.
The simultaneous decline across several categories increased the impact on total exports during the year.
Gulf Exports Decline
Pakistan’s exports to Gulf countries also declined during the period, falling by around $100 million.
The Gulf region represents an important market for Pakistani products, making the decline significant for exporters already facing challenges from higher costs and disruptions in regional trade.
Regional instability can affect both demand and the movement of goods, particularly when exporters rely on established transport and shipping routes connecting Pakistan with Middle Eastern markets.
The reduction in exports to Gulf countries therefore added another layer of pressure to Pakistan’s external trade performance.
Central Asia and Afghanistan See Sharp Drop
Pakistan’s exports to Central Asian countries and Afghanistan recorded an even sharper decline.
According to the reported figures, exports to these markets fell by 59% during fiscal year 2025-26.
The contraction highlights the broader challenges facing Pakistan’s regional trade at a time when geopolitical uncertainty has affected commercial activity and transportation routes.
A significant reduction in exports to neighbouring and nearby markets can also limit opportunities for Pakistani businesses seeking to expand their regional presence.
Middle East Tensions Affect Trade
The decline in exports comes amid heightened tensions between the United States and Iran and wider instability across the Middle East.
The region plays an important role in Pakistan’s trade network, both as a destination for Pakistani goods and as a major corridor for international shipping and commercial activity.
Disruptions in regional markets and transportation routes can increase costs for exporters and make it more difficult for businesses to maintain established supply chains.
The reported decline in Pakistan’s exports reflects some of the wider economic pressures associated with the regional situation.
Government Considers Measures for Exporters
With exports declining, the government is considering measures aimed at improving the competitiveness of Pakistani exporters.
Among the measures under consideration are efforts to reduce energy costs and taxes, which have been identified as important factors affecting production expenses.
Lower energy and tax costs could help exporters reduce their overall production costs and compete more effectively in international markets.
The government is also seeking ways to strengthen Pakistan’s export base and support businesses facing rising costs and challenging external conditions.
Focus on Export Competitiveness
The latest figures have renewed attention on Pakistan’s export performance and the need to improve the competitiveness of domestic industries.
Exporters face a combination of domestic production costs and external challenges, including changes in international demand, geopolitical uncertainty and disruptions to regional trade routes.
Improving energy affordability, reducing unnecessary costs and strengthening access to international markets are among the measures being considered to support export growth.
The government’s response will be important as Pakistan seeks to rebuild export momentum following the decline recorded in fiscal year 2025-26.
For now, the fall from around $32 billion to $30.8 billion underscores the pressure faced by Pakistan’s export sector amid regional economic and geopolitical challenges.
Also read: Pakistan and Türkiye Leaders Discuss Middle East Tensions
