The United States continued to be Pakistan’s largest export destination during Fiscal Year 2025-26, showing the strong importance of the American market for Pakistani businesses. According to data compiled by Topline Securities from State Bank of Pakistan figures, around 20 percent of Pakistan’s total exports went to the United States during FY26.
At the same time, China remained Pakistan’s second-largest export market, receiving around 9 percent of Pakistan’s exports. However, the trade relationship with China is very different from the one Pakistan has with the United States. While America is the biggest buyer of Pakistani products, China is Pakistan’s biggest source of imports and the country with which Pakistan has its largest trade deficit.
This situation shows an important part of Pakistan’s foreign trade picture. Pakistan sells a large amount of goods to the United States, but it buys much more from China than it sells there. As a result, China continues to create the largest gap between Pakistan’s exports and imports.
America Takes the Top Position
Pakistan’s trade with the United States has remained important for many years. During FY26, the US accounted for about one-fifth of Pakistan’s total exports. This made it the country’s leading export destination by a clear margin.
For Pakistani exporters, the US market is especially important because it provides a large customer base for several major industries. Textile products, clothing, home textiles, leather goods, surgical items, sports goods and other products from Pakistan find buyers in the American market.
The size of the US market gives Pakistani companies an opportunity to earn valuable foreign exchange. Export earnings are important for Pakistan because the country needs foreign currency to pay for imports, meet international financial obligations and support its economy.
The continued position of the United States as Pakistan’s biggest export destination therefore provides an important source of income for the country.
However, depending heavily on one major market also brings risks. If demand in the United States falls, or if American trade policies change, Pakistani exporters can feel the impact quickly.
China Remains the Second-Largest Export Market
China ranked second among Pakistan’s export destinations during FY26, with a share of around 9 percent of total exports.
Although Pakistan exports fewer goods to China than it does to the United States, China remains a major trading partner. The two countries have strong economic relations and have worked together on several projects under the China-Pakistan Economic Corridor and wider economic cooperation.
Pakistan exports different products to China, including agricultural goods, minerals, seafood, textiles and other items. There is also potential for Pakistan to increase exports to China if local businesses can improve product quality, meet Chinese market requirements and develop stronger connections with buyers.
China has a very large population and one of the biggest consumer markets in the world. This means there is considerable room for Pakistani exporters to increase their sales if they can compete successfully.
China Creates Pakistan’s Biggest Trade Deficit
The biggest concern in Pakistan-China trade is not the level of exports. It is the huge difference between what Pakistan sells to China and what it buys from the country.
During FY26, China remained Pakistan’s largest trade deficit partner, with the trade deficit reaching about $16.85 billion.
A trade deficit happens when a country imports more goods and services from another country than it exports to that country. In Pakistan’s case, the difference with China has remained very large.
China supplies Pakistan with a wide range of products. These include machinery, electrical equipment, electronics, industrial goods, chemicals, mobile phones, vehicles, raw materials and many other products.
Many Pakistani industries depend on imported machinery, parts and raw materials from China. These imports can help local businesses produce goods, but they also increase Pakistan’s overall import bill.
As imports from China remain much higher than exports to China, the trade gap continues to put pressure on Pakistan’s external accounts.
Why Pakistan Buys So Much From China
There are several reasons behind Pakistan’s high imports from China. One major reason is the large manufacturing base of the Chinese economy.
China produces almost every type of industrial and consumer product. Its factories can supply goods in large quantities and at prices that are often attractive to buyers.
For Pakistani businesses, Chinese machinery, equipment and raw materials can be useful for manufacturing and construction. Small businesses also import products from China for local sale.
Chinese products are present in many areas of Pakistan’s economy. From electronics and household items to industrial machines and construction equipment, businesses and consumers use products made in China every day.
The problem arises when imports grow much faster than exports. If Pakistan continues buying heavily from China without increasing its own sales in the Chinese market, the trade gap can remain high.
US and China Play Different Roles
The trade relationship with the United States and China shows two very different sides of Pakistan’s economy.
The United States is mainly important as a major destination for Pakistani exports. Pakistan sends a large amount of goods to American customers, helping the country earn foreign exchange.
China, meanwhile, is both an important export market and Pakistan’s largest supplier of imported goods. Pakistan buys much more from China than it sells there, resulting in the country’s biggest trade deficit.
This does not mean that trade with China is harmful in every way. Imports can support Pakistani industries, especially when they include machinery, technology and production equipment. But Pakistan needs to make sure that its exports grow along with imports.
A healthier trade relationship would involve Pakistani businesses selling more products in China while continuing to use imports that support local production.
Pakistan Needs More Export Markets
The latest trade figures also highlight the need for Pakistan to expand its export markets. The United States is a major buyer, but relying too much on one market can create problems.
Pakistan needs to increase exports to Europe, the Middle East, Central Asia, Africa and other Asian markets. More markets would give Pakistani exporters greater protection if demand falls in one particular country.
Market diversification can also encourage companies to develop new products. When businesses enter different markets, they often learn about new customer needs, quality standards and business practices.
Pakistan has several industries that can increase exports if they receive the right support. Textiles and garments remain important, but there is also potential in agriculture, food processing, information technology, software services, pharmaceuticals, engineering goods, sports products and other value-added industries.
Value-Added Products Can Improve Exports
One of Pakistan’s major challenges is that the country has not fully developed its value-added export potential.
Selling raw materials or basic products usually brings less income than selling finished products. For example, instead of exporting basic agricultural commodities, Pakistan can earn more by processing them into packaged food products.
The same idea applies to textiles. Pakistan can benefit by producing more branded clothing, finished garments and specialised textile products instead of relying mainly on lower-value items.
Value-added exports can increase foreign exchange earnings and create more jobs inside the country.
This is especially important because Pakistan needs stronger and more stable export earnings to support economic growth.
Pakistani Businesses Need Better Access to China
China’s large market offers a major opportunity for Pakistani exporters. However, increasing exports to China requires more than simply producing goods.
Pakistani companies need to understand what Chinese consumers want. They also need to meet quality requirements, improve packaging, build reliable supply chains and connect directly with Chinese buyers.
Agricultural products are one area where Pakistan may have opportunities. Pakistan has a strong agricultural base and produces rice, fruits, vegetables, seafood and other products that can find buyers abroad.
Improving storage, packaging and transportation can help Pakistani agricultural exporters compete in international markets.
The government can also support exporters by helping them attend international trade exhibitions, find foreign buyers and understand the rules of different markets.
The Textile Sector Remains Important
The textile industry is one of the strongest parts of Pakistan’s export sector, particularly in trade with Western markets.
Pakistani textile companies have established relationships with international buyers and produce a wide range of products. These include garments, towels, bed linen, fabrics and other textile goods.
The United States is an especially important market for these products. Strong demand from American buyers has helped the textile sector remain a major source of export earnings.
However, Pakistani textile companies face competition from other countries. Bangladesh, Vietnam, India, Turkey and several other countries are also major players in international textile markets.
To remain competitive, Pakistani exporters need better technology, reliable energy supplies, improved product quality and faster delivery.
Exporters Need a More Competitive Environment
Increasing exports requires a business environment where companies can compete internationally.
High production costs can make Pakistani goods more expensive. Problems related to energy, transport, taxes, financing and government procedures can also create difficulties for businesses.
If Pakistani exporters want to gain a larger share of international markets, these issues need attention.
Businesses also need easier access to financing so they can invest in modern machinery and expand production. Better infrastructure can reduce transport costs and improve delivery times.
A stronger export sector can only develop when government policies and private businesses work together.
Trade Figures Send an Important Message
The FY26 figures provide a clear message about Pakistan’s international trade position. The United States remains the country’s largest export destination, accounting for around 20 percent of total exports. China follows with about 9 percent.
At the same time, China’s $16.85 billion trade deficit shows how heavily Pakistan depends on Chinese imports.
These numbers do not simply show which countries Pakistan trades with. They also show where the country needs to improve.
Pakistan has already built strong relationships with major international markets. The next step is to increase the amount and value of goods it sells abroad.
More Exports Can Help Pakistan’s Economy
Higher exports can provide several benefits to Pakistan. The most direct benefit is an increase in foreign exchange earnings.
More exports can also support industrial growth and create employment. When factories receive more international orders, they need more workers and may invest in additional machinery.
Export growth can also encourage companies to improve their products. International customers often have strict requirements, which can push local businesses to improve quality and production methods.
For Pakistan, stronger exports can therefore support both short-term foreign exchange needs and long-term economic development.
Pakistan Must Balance Its Trade Relations
Pakistan’s trade with the United States and China will remain important in the coming years. The challenge is to make better use of both relationships.
The US market can continue to provide strong demand for Pakistani exports. At the same time, Pakistan can work to increase exports to China and reduce the large trade gap by developing more competitive products.
Pakistan should also look beyond these two major markets. New opportunities in Central Asia, the Gulf, Europe, Africa and other regions can help reduce dependence on a small number of trading partners.
A wider export base would make Pakistan’s economy more stable and give local businesses more opportunities.
A Stronger Export Strategy Is Needed
The latest figures show that Pakistan has an important position in the US market but still faces a major trade imbalance with China.
The United States remains Pakistan’s top export destination, taking around one-fifth of the country’s total exports during FY26. China ranks second as an export market, but it is also Pakistan’s biggest source of imports and the country’s largest trade deficit partner.
For Pakistan, the goal should not simply be to increase exports to one country. The country needs a wider and stronger export strategy.
This means improving product quality, increasing value-added production, supporting exporters, reducing business costs and finding new international customers. Pakistan also needs to help local companies compete with businesses from countries that already have strong positions in global markets.
The country has many products and industries with export potential. What is needed is greater investment, better planning and stronger access to international buyers.
If Pakistan can increase exports while keeping imports focused on products that support local production, it can gradually reduce trade pressure and strengthen its economy.
The latest trade figures therefore offer both good news and a warning. The good news is that the United States continues to provide a large and valuable market for Pakistani products. The warning is that Pakistan’s trade deficit with China remains extremely high.
Going forward, Pakistan will need to turn its trading relationships into greater export opportunities. Increasing sales abroad, entering new markets and producing more value-added goods can help the country earn more foreign exchange and build a stronger economic future.
Read Also: check
