Pak-BD trade prospects

In the wake of the changing political landscape in Bangladesh, the bilateral relationship between Pakistan and Bangladesh is poised to normalise once again, after remaining strained since 2008. In this context, several initiatives have already been taken by both sides to harness the existing potential and foster a cooperative, sustainable partnership in key economic and industrial sectors—particularly in trade and investment.

However, despite these early gestures of goodwill and formal agreements, tangible progress has been slow, and much of the real potential remains untapped.

A notable development took place during August 24–25, 2025, when Pakistan’s Deputy Prime Minister and Foreign Minister Ishaq Dar visited Dhaka and met Bangladesh’s Chief Adviser Muhammad Yunus.

According to Bangladeshi media, both sides expressed their resolve to restore “old connections” and strengthen cooperation in trade, connectivity, and youth exchanges. Just days earlier, from August 21–24, Pakistan’s Commerce Minister Jam Kamal Khan led a high-level delegation to Bangladesh.

A significant outcome of these engagements was an agreement to revitalise the long-inactive Pakis tan–Bangladesh Joint Economic Commission (JEC) and establish a new Trade and Investment Commission, aimed at expanding and facilitating bilateral economic cooperation.

Earlier in January 2025, a 35-member delegation of the Federation of Pakistan Chambers of Commerce & Industry visited Bangladesh to promote bilateral trade.

During the visit, a memorandum of understanding was signed to establish a Joint Business Council. Simultaneously, the Trading Corporation of Pakistan signed an agreement in Dhaka on January 14 for the export of rice to Bangladesh. In another recent development, the Trade Development Authority of Pakistan organised a visit of Pakistani exporters of electrical cables and other products to Bangladesh in September 2025. These initiatives reflect a shared commitment to enhance multi-sectoral cooperation. However, they have yet to translate into a substantial increase in trade volumes or large-scale joint ventures.

Bilateral trade between the two countries stood at USD 865 million in FY2025, reflecting a 20 percent increase over the previous year’s USD 712 million. Pakistan’s exports to Bangladesh rose by 19 percent to USD 787 million, while imports from Bangladesh increased by 38 percent to USD 78 million. This encouraging uptick signals a positive trend, but whether it marks a structural shift or a temporary rise remains to be seen. By comparison, Pakistan’s exports to Bangladesh were USD 661 million in FY2023–24 and USD 839 million in 2022, the highest in the past decade. Imports from Bangladesh had declined from over USD 90 million in 2021 to USD 57 million in FY2023–24.

Looking ahead, the projected trade volume could reach USD 3 billion within the next three years. Achieving this ambitious target will, however, require concluding a Free Trade Agreement (FTA) or Preferential Trade Agreement (PTA), expanding into new trade sectors, and improving transport and logistics links. Addressing both tariff and non-tariff barriers will be crucial. Bangladesh’s total exports globally exceeded USD 50 billion in 2024, while its imports were around USD 70 billion, offering Pakistan significant room to increase its market share.

There are promising opportunities for exporting Pakistani engineering goods—including machinery and equipment for sugar, cement, and chemical plants, as well as for railways. Light engineering products such as tractors, agricultural implements, automotive parts, irrigation pumps, power transformers, transmission towers, boilers, mining equipment, and air-conditioning systems are also in demand. With its well-established industrial base and internationally competitive pricing, Pakistan is well-positioned to supply these goods to Bangladesh.

Historically, Pakistan has supplied railway coaches, equipment, and rolling stock to Bangladesh—a cooperation that can be meaningfully revived and expanded.

The Bangladeshi sugar industry represents a particularly strong potential market. The country operates 15 public-sector sugar mills and previously imported two turnkey mills—Natore and Pabna—from Pakistan, each with a daily crushing capacity of 1,500–2,000 tons. These mills continue to perform efficiently.

With Bangladesh planning large-scale investment and modernisation in its sugar sector, which is projected to reach USD 2.29 billion by 2030, Pakistan can re-enter this market as a key supplier of machinery and refined sugar.

Similarly, Bangladesh’s construction and cement industries are experiencing rapid growth, driven by urbanisation, industrial expansion, and its position as South Asia’s second-largest economy. Its cement industry—with 42 plants and a capacity of 78 million tons per year—faces challenges including outdated machinery and financial constraints.

Pakistan has previously supplied machinery to this sector, notably at the Mongla Cement Factory, and could play an important role in modernising the industry through joint ventures, technology transfer, and industrial collaboration.

Pakistan’s traditional exports to Bangladesh include textiles, mineral products, industrial machinery, and chemicals, while imports from Bangladesh primarily consist of jute, textile fibres, raw tobacco, and scrap vessels. Opportunities also exist in rice, cement, sugar, steel, ceramics, marble, coal, sports goods, and surgical instruments.

Conversely, Bangladesh could expand its exports of leather goods, plastic products, tea, and other commodities to Pakistan. Moreover, joint ventures in IT, cement, pharmaceuticals, and chemicals could substantially enhance bilateral cooperation.

While the political climate and policy signals are encouraging, turning potential into performance will require a clear roadmap and timely execution. Reactivating the Pakistan–Bangladesh Joint Economic Commission, which has been dormant for years, is especially crucial. Regional trade frameworks such as the South Asian Free Trade Area (SAFTA) and Developing 8 Countries (D-8) should also be revitalised to broaden economic and industrial linkages.

In short, the groundwork for a stronger bilateral economic partnership has been laid. The real gains, however, will depend on sustained political will, removal of trade barriers, and concrete follow-up actions. A proactive, sector-focused approach can turn Pakistan–Bangladesh cooperation into a powerful pillar of regional economic growth and integration.

Copyright Business Recorder, 2025