How can Pakistan Boost/ Recover/ Grow its Exports?

How can Pakistan Boost/ Recover/ Grow its Exports?

Exports are a potent tool in the development and progress of developing countries. The importance of the economy and economic problems is enormous in today’s global world. However, exports play a crucial role in the economy by shaping the level of economic growth, employment and the balance of payments. This, in turn, grows the economy from which the state can tax that revenue and gain the capacity and resources needed to provide the public goods and services that their citizens need, like healthcare, education, social protection and basic public services. Also, there is an increase in revenue, jobs, foreign exchange reserves, and liquidity. In simple words, exports are significant in spurring economic growth in a country. Nonetheless, many developing countries have a looming economy due to limited access to foreign markets because of import barriers and greater dependency on imports than exports resulting in a trade deficit. Therefore, these countries must adopt intelligent policies to boost the export industry, giving a competitive advantage and fostering overall economic growth in the long run.

The situation of Pakistan’s Exports

Pakistan’s economy largely depends on exports because the foreign income generated is used to pay for imports, pay off debt, stabilise the rupee, and address the country’s enduring balance of payment deficit issue. However, the investments required to fortify Pakistan’s exports are limited due to the non-conducive investment environment. . Investment in the industry is half that of our neighbouring countries (PCB, 2017). Moreover, the country relies more on imports than its exports. In 2020, $1.39 billion in merchandise exports was recorded, a 34% drop from a year ago (World Bank Blogs, 2020). Imports into Pakistan during April 2022 amounted to Rs. 1,232,104 million (provisional) as against Rs. 1,150,786 million in March 2022 and Rs. 802,443 million during April 2021, showing an increase of 7.07% over March 2021 and 53.54% over April 2021 (Pakistan Bureau of Statistics, 2022).

Furthermore, exports are also hampered by the government’s irrational policies and complex incentives offered to the industry. Higher tariff structure, erratic growth trends, low penetration in global markets, and lack of infrastructure and technological advancement further contribute to the downfall of exports in the country. The country’s foreign exchange, employment, and productivity growth are all impacted by the long-term decline in exports as a share of GDP. As a result, the country has had to resort twelve times to the IMF in the last three decades (PCB, 2017). Also, the shares of exports in GDP have been declining, from 16 per cent in 1999 to 10 per cent in 2020 (The World Bank, 2021). Since exports are instrumental to the economic recovery of Pakistan, it is essential to highlight the core challenges that are crucial for the country to compete in the global market and boost the export industry.

Steps to Boost Exports in Pakistan

Ease up Import Restrictions

Industries need to import inputs to export competitively on international markets. Manufacturing in Pakistan is behind its Asian competitors, and the economy is increasingly driven by import-based consumption, which now represents over 80% of the GDP (PCB, 2017).  Therefore, the country needs to ease import restrictions such as eliminating tariffs, regulatory duties, and additional customs duties on melt-blown fibre, which currently stands at 12 per cent (Varela, 2020). Moreover, industrial strategies like ‘Make in Pakistan’ primarily depend on Pakistani producers’ ability to obtain raw materials and intermediate inputs at market prices. To ensure its success in global markets, import duties on final goods will also need to fall gradually. Also, introducing sunset clauses to tariff protection may aid in eliminating the anti-export bias.

Adopting Innovative Solutions

Pakistan must take advantage of exportable goods and services that require little infrastructure and funding. For instance, it is easier to establish a software house than to set up a manufacturing unit to cater to the growing global demand for software and IT solutions. Pakistan’s IT exports increased by 44% to USD 379 million during the first quarter of the fiscal year 2020-21 (Sattar, 2021). There are many opportunities to expand and explore ways to improve software export. Pakistan has an abundance of talent. With little effort from the government, Pakistan’s IT sector can grow to contribute USD 1 billion annually (Sattar, 2021). The Trade Development Authority of Pakistan (TDAP) should adapt to this fast-changing reality and utilise artificial intelligence and big data to assist exporters in maximising the potential of online marketing platforms.

Empowering SMEs to Comply with International Standards

The Pakistani economy consists of almost 3.3 million Small and Medium Enterprises (SMEs), making up over 30% of Pakistan’s GDP and approximately 25% of generating exports (Sattar, 2021). The government needs to take effective measures and structure intelligent policies to empower SMEs and allow them to reach their maximum potential by complying with international standards. Offering easy access to credit, lower interest rates on loans, ) for the purchase or import of machinery, and programmes for skill development and training can be a good place to start in order to unleash the potential of SMEs. Also, the government of Pakistan needs to provide information about the requirements of the international standard and support the country’s exporters to comply with them.

Making Exports Globally Competitive

To make Pakistani goods competitive globally, the government should boost domestic product productivity and technological content and offer incentives for fostering innovation. According to UNDP National Human Development Report, the skilled unemployment level is 20% (college graduates) in Pakistan (Sattar, 2021), and a significant portion of unemployed people are educated. With such levels of unemployment, the country cannot reap the economic returns required for economic growth. Therefore, the government should focus on nurturing entrepreneurship and make the ease of doing business a priority to encourage innovation for standard quality distinct products and services. This will help revive exports and give them a competitive edge in global markets.

Making Trade Feasible for Everyone

One of the most effective ways to help people escape poverty is to increase trade. Initiatives such as the World Logistics Passport can assist governments in collaborating more closely on trade and reviving their economies by making it easier for exporters and importers to yield the advantages of global trade. Governments and businesses can build a more robust global trading community that is both agile and resilient by cooperating across borders toward a common goal. Improving standard duty drawback schemes by making them available to indirect exporters and extending them to imported inputs used in the production of exported final products and eliminating duty pre-payment for exporting firms to reduce credit requirements are also critical in making trade possible for everyone.


Exports are essential for social productivity and economic growth. However, the declining performance of Pakistan’s exports has resulted in a gloomy economic outlook. This is increasing the dependency of the country on foreign funds, which is mounting up the debts even more. High tariff structure, strict government policies and complex incentives negatively impact the export industry. Since the country’s economy greatly depends on exports, it is imperative for the government to adopt intelligent policies that would revive and boost exports of Pakistan. A strong export industry will help the nation grow, increase revenue, create employment and increase foreign currency reserves. It will also drive economic trade, strengthening the country’s economy in the long run.


Pakistan Bureau of Statistics. (2022, April). Government of Pakistan Pakistan Bureau of Statistics. Retrieved from

PCB. (2017, December). The Pakistan Business Council. Retrieved from

Sattar, S. (2021). Pakistan Institute of Development Economics. Retrieved from PIDE:

The World Bank. (2021, October). Pakistan Development Update Reviving Exports. The World Bank. Retrieved from

Varela, G. (2020, June 12). Four actions to speed up Pakistan’s export recovery. Retrieved from World Bank:

World Bank Blogs. (2020, June 12). Retrieved from

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IMARAT Institute of Policy Studies

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