FPCCI warns of widening trade deficit, urges faster export support

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday voiced concern over a sharp deterioration in the country’s trade balance, saying Pakistan needed to move quickly on a broad-based strategy to strengthen exports and ease pressure on the external account.

The business body said the trade deficit rose by 20.28pc to $31.99 billion during July-April FY26, compared to $26.59bn in the same period a year earlier. FPCCI President Atif Ikram Sheikh said the increase reflected a widening gap between imports and exports at a time when foreign exchange reserves remained vulnerable.

According to Mr Sheikh, Pakistan’s import bill climbed by nearly 7pc to $57.19bn in the first 10 months of FY26, while exports fell by 6.25pc to $25.21bn from $26.89bn in the corresponding period last year. He said the figures showed that imports were more than twice the value of exports, which had pushed the cumulative trade gap significantly higher.

“This shows that the country is importing more than double the value of its exports, pushing the cumulative trade deficit up by 20.28pc to $31.99bn from $26.59bn a year ago,” he added.

The FPCCI said the only durable way to stabilise the fragile external account and safeguard foreign exchange reserves was to accelerate a comprehensive policy framework aimed at aggressively supporting export-oriented sectors. It also called on the government to restrain unnecessary imports that were adding to the imbalance.

April deficit hits 46-month high

Mr Sheikh said the monthly trade deficit in April reached a 46-month high of $4.07bn. He noted that exports during the month increased 14.03pc year-on-year to $2.48bn, but the rise was offset by a much steeper increase in import payments.

FPCCI Senior Vice President Saquib Fayyaz Magoon said the latest import surge suggested that short-term import compression measures had not delivered lasting results. He said the country needed to address structural weaknesses in the export sector without delay.

The chamber also pointed to some improvement in the services account. It said the services deficit narrowed by 6.7pc to $2.15bn during July-March FY26, helped by a 17pc increase in services exports to $7.35bn. Even so, the FPCCI maintained that merchandise exports remained the main pillar of the economy.

Mr Magoon said traditional manufacturing and textile industries were finding it difficult to remain competitive in international markets because of elevated energy tariffs, a tight monetary stance and a worsening business environment.

Industry seeks tariff and rate relief

FPCCI Vice President Abdul Mohamin Khan called for immediate rationalisation of electricity and gas prices for export-oriented industries so that they could compete with regional economies on a more equal footing. He also urged a substantial cut in the policy rate to support industrial borrowing and expansion.

Separately, Korangi Association of Trade and Industry President Muhammad Ikram Rajput also asked the government to introduce comprehensive measures to raise exports while cutting avoidable imports. He proposed higher duties on non-essential and luxury items and suggested an outright ban on certain imports considered unnecessary in order to preserve foreign exchange.

The statements from business leaders came as concerns mounted over the pace of import growth and the decline in exports during the current fiscal year, with industry representatives pressing for policy changes focused on export competitiveness and import management.