The Economic Policy and Business Development (EPBD) has released a report on Pakistan’s trade policy, recommending that future strategies be developed at the district level.

The report noted that after the 18th Amendment, industries, agriculture and skills development were transferred to the provinces. However, trade policy remains largely a federal responsibility.

EPBD recommended a bottom-up approach for the formulation of a new trade policy, saying district-level strategies could better reflect local industries, production capacity and export opportunities.

Export targets continue to fall short

The report said Pakistan’s trade policy frameworks from 2009 to 2025 failed to achieve their export targets. The export target shortfall stood at 4.45% between 2009 and 2012.

According to the report, the gap widened sharply between 2020 and 2025, when the export target shortfall reached 43.68%.

In fiscal year 2025, exports accounted for only 10.4% of Pakistan’s GDP, while imports stood at 17.21%, increasing pressure on the country’s external accounts.

Rising imports add to trade pressure

The report said import demand has continued to grow faster than Pakistan’s export capacity. It added that higher production costs remain a major obstacle to improving export competitiveness.

Even during periods of economic expansion, Pakistan continued to face external imbalances, with twin deficits recurring over the past two decades.

EPBD also called for effective reforms in trade-related institutions and stronger measures to improve export performance.