[ IMPORT AND EXPORT OF

PAKISTAN]
Import and Export

Project

Import and Export of Pakistan

Presented To:

Sir Nissar Hussain

Group Name:

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Presented by:
Ayesha Nazir (Group Leader)
Hafiz Ijaz
Saira Ramzan
Aqsa Shahzadi
Muhammad Nouman
Subject: Business Mathematics
Department: ADP (Accounting and Finance)

Superior Group of Colleges

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Import and Export of Pakistan

Introduction

What is an 'Import'?
An import is a goods or services brought into one country from another. The word "import" is derived
from the word "port" since goods are often shipped via boat to foreign countries. Along with exports,
imports form the backbone of international trade. If the value of imports entering a country is greater than
the value of exports, the country is considered to have a negative balance of trade.

What is an ‘Export’?
Definition: Exports are the goods and services produced in one country and purchased by citizens of
another country. It doesn't matter what the good or service is. It doesn't matter how it is sent. It can be
shipped, sent by email, or carried in personal luggage on a plane. If it is produced domestically and sold
to someone from a foreign country, it is an export.

For example, American tourism products and services can be exports.

Pakistan is the 54th largest export economy in the world. In 2016, Pakistan exported $20.5B and imported
$45.9B, resulting in a negative trade balance of $25.5B. In 2016 the GDP of Pakistan was $283B and its
GDP per capita was $5.25k.

The top exports of Pakistan are House Linens ($2.99B), Rice ($1.7B), Non-Knit Men's Suits ($1.48B),
Non-Retail Pure Cotton Yarn ($1.18B) and Heavy Pure Woven Cotton ($936M), using the 1992 revision
of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($5.74B), Crude
Petroleum ($1.98B), Palm Oil ($1.7B), Petroleum Gas ($1.06B) and Cars ($1B).

The top export destinations of Pakistan are the United States ($3.43B), China ($1.59B), the United
Kingdom ($1.56B), Afghanistan ($1.37B) and Germany ($1.19B). The top import origins are China
($17.2B), the United States ($2.11B), Indonesia ($2.02B), Japan ($1.93B) and India ($1.59B).

Pakistan borders Afghanistan, China, India and Iran by land and Oman by sea.

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Pakistan’s Top 10 Exports

The following export product groups represent the highest dollar value in Pakistani global shipments
during 2016. Also shown is the percentage share each export category represents in terms of overall
exports from Pakistan. At the more granular four-digit Harmonized Tariff System code level, Pakistan’s
number one exported product is textiles including bed linens, table linens, and bathroom and kitchen
linens. In second place was rice shipped from Pakistan.

 Textiles, worn clothing: US$3.8 billion (20.1% of total exports)

 Clothing, accessories (not knit or crochet): $3 billion (16.1%)

 Knit or crochet clothing, accessories: $2.6 billion (13.8%)

 Cotton: $2.5 billion (13.2%)

 Rice ($1.7B)

 Leather/animal gut articles: $700.6 million (3.7%)

 Sports goods $415.9 million (2.2%)

 Fruits, nuts: $388.2 million (2.1%)

 Manmade staple fibers: $367.3 million (2%)

 Fish & Fish Fruits: $334.6 million (1.8%)

Pakistani unknit and non-crochet clothing and accessories was the fastest-growing among the top 10
export categories, up by 77.7% during the 7-year period starting in 2009.

In second place for improving export sales were knit or crochet clothing and accessories which rose by
29.1%.

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Pakistan’s exported mineral fuels including oil posted the third-fastest gain in value up by 25.8%.

Pakistan Top 5 Products exports imports at HS 6 digit level 2013

 The top five exported HS 6 digit level products to world by Pakistan along with trade value are:
 Pakistan exported Semi-milled or wholly milled rice, worth US$ 1,790,214.26 million.

Pakistan exported Uncombed Pakistan top 5 Export and Import partners 2013
Top five countries to which Pakistan exported in 2013 are below, along with the percent of total exports
that went to that country:

 Pakistan exports to United States worth US$ 3,746 million, with a partner share of 14.91 percent.
 Pakistan exports to China worth US$ 2,652 million, with a partner share of 10.56 percent.
 Pakistan exports to Afghanistan worth US$ 1,998 million, with a partner share of 7.95 percent.
 Pakistan exports to United Arab Emirates worth US$ 1,775 million, with a partner share of 7.07
percent.
 Pakistan exports to United Kingdom worth US$ 1,432 million, with a partner share of 5.70
percent.

List of trading partners

The following is a list of Pakistan's main trading partners as of JULY 2017.

Country Percentage of imports Percentage of exports Percentage of total

trade
Afghanistan 0.3 7.6 2.8
China 31 11 16.9
EU 10.4 18.2 13.0
India 3.7 2.1 3.2
Iran 3.4 1.8 2.9
Japan 3.6 1.6 2.9
Kuwait 6.3 0.07 4.4
Malaysia 9 0.9 2.9
Saudi Arabia 12.2 8.5 9.0
Singapore 4.1 0.3 2.8
United Arab Emirates 12.1 8.5 10.9
United States 3.7 13.6 6.7

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Led by wheat and corn, the fastest-declining category among the top 10 Pakistani exports was cereals
which fell in value by -55.5%. Cotton exports from Pakistan depreciated by -52.6%.

Pakistan's exports continue to be dominated by cotton textiles and apparel. Imports include petroleum and
petroleum products, edible oil, chemicals, fertilizer, capital goods, industrial raw materials, and consumer
products.

Pakistan has highly positive net exports in the international trade of clothing-related products. In turn,
these cash flows indicate Pakistan’s strong competitive advantages under various clothing-related
categories

TRADE SUMMARY FOR PAKISTAN 2013

The trade deficit for the fiscal year 2013/14 is $7.743 billion, exports are $10.367 billion in July–
November 2013 and imports are $18.110 billion.

Pakistan's exports for the year 2015-2016 stood at US$ 21 Billion. And imports were at US$ 44.76 billion
for the same period.

Pakistan exports rice, mangoes, furniture, cotton fiber, cement, tiles, marble, textiles, clothing, leather
goods, sports goods (renowned for footballs/soccer balls), cutlery, surgical instruments, electrical
appliances, software, carpets, rugs, ice cream, livestock meat, chicken, powdered milk, wheat, seafood
(especially shrimp/prawns), vegetables, processed food items, Pakistani-assembled Suzuki’s (to
Afghanistan and other countries), defense equipment (submarines, tanks, radars), salt, onyx, engineering
goods, and many other items. Pakistan produces and exports cements to Asia and the Middle East. In
August 2007, Pakistan started exporting cement to India to fill in the shortage there caused by the
building boom. Russia is a growing market for Pakistani exporters. In 2009/2010 the export target of
Pakistan was US $20 billion. As of April 2015, Pakistan's exports stand at US $29 billion.

Imports
In 2016 Pakistan imported $45.9B, making it the 44th largest importer in the world. During the last five
years the imports of Pakistan have increased at an annualized rate of 6.63%, from $44.6B in 2011 to
$45.9B in 2016. The most recent imports are led by Refined Petroleum which represent 12.5% of the total
imports of Pakistan, followed by Crude Petroleum, which account for 4.32%

Import Items
# MAJOR COMMODITIES

1 Machinery

2 Petroleum

3 Chemicals

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4 Vehicles and Spare Parts

5 Edible Oil

6 Wheat

7 Tea

8 Fertilizers

9 Plastic material

10 Paper Board

11 Iron and Steel

12 Pharmaceutical Products

Overall Exports and Imports for Pakistan 2013

 Exports and imports of Pakistan in 2013 are below, along with number of countries and products
 The total value of imports (CIF) was 43,775 million.
 At the HS6 digit level, 2,876 products were exported to 204 countries and 4,071 products were
imported from 220 countries.
 worth US$ 1,963 million, with a partner share of 4.48 percent

Top five countries from which Pakistan imported goods in 2013 are below,
along with percent of total imports that came from the country:
 Pakistan imports from United Arab Emirates worth US$ 7,752 million, with a partner share of
17.71 percent.
 Pakistan imports from China worth US$ 6,626 million, with a partner share of 15.14 percent.
 Pakistan imports from Kuwait worth US$ 3,949 million, with a partner share of 9.02 percent.
 Pakistan imports from Saudi Arabia worth US$ 3,847 million, with a partner share of 8.79
percent.
 Pakistan imports from Japansingle cotton yarn, with >=85% cotton, worth US$ 1,436,430.76
million.
 Pakistan exported Toilet linen and kitchen linen, of terry fabric, worth US$ 760,469.74 million.
 Pakistan exported Bed linen of cotton (excl. printed, knitted or, worth US$ 673,166.26 million.
 Pakistan exported Bed linen, knitted or crocheted, worth US$ 669,800.35 million.

The top five imported HS 6 digit level products from world by Pakistan along
with trade value are

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 Pakistan imported Petroleum oils, etc., (excl. crude); preparation, worth US$ 9,257,975.92
million.
 Pakistan imported Petroleum oils and oils obtained from bituminous, worth US$ 5,473,296.10
million.
 Pakistan imported Palm oil (excl. crude) and liquid fractions, worth US$ 1,610,011.71 million.
 Pakistan imported Vessels and other floating structures for break, worth US$ 962,764.85 million.
 Pakistan imported new stamps; stamp-impressed paper; banknotes; c, worth US$ 815,798.60
million.

Exports and Imports of Product Groups 2013

Exports and imports of products by stages of processing in 2013 are below along with their
corresponding Product Share as percent of total export or import

Pakistan Raw materials exports were worth US$ 2,550 million, product share of 10.15%.

Pakistan Raw materials imports were worth US$ 8,810 million, product share of 20.12%.

Pakistan Intermediate goods exports were worth US$ 8,308 million, product share of 33.07%.

Pakistan Intermediate goods imports were worth US$ 12,670 million, product share of 28.94%.

Pakistan Consumer goods exports were worth US$ 13,554 million, product share of 53.96%.

Pakistan Consumer goods imports were worth US$ 15,823 million, product share of 36.15%.

Pakistan Capital goods exports were worth US$ 708 million, product share of 2.82%.

Pakistan Capital goods imports were worth US$ 6,464 million, product share of 14.77%.

TARIFFS 2013:
Tariffs imposed by Pakistan in 2013 are below

 The maximum rate of tariff in percentage on any product was 846 percent.
 The simple average tariff across all products was 14.65 percent.
 The trade weighted average tariff was 9.41.
 The total duty free imports in thousands of US dollars were 10,742,423.65 and duty free tariff
line items share was 7.12 percent.

DEVELOPMENT INDICATORS 2013

 Key Development Indicators of Pakistan in 2013 are below
 Pakistan GDP in current US dollar was 231,219 million.

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 GNI per capita, Atlas method (current US$) was 1,360.00.

 Pakistan Trade balance: as % of GDP was -6.78.
 Trade balance in current US$ was -15,675.00 million.

CAUSES OF LOW EXPORTS and HIGH IMPORTS IN PAKISTAN:

Lack of Finance Facility to Textile:

One main reason of low exports is lack of finance facilities to the textile sector by govt. All Pakistan
Textile Mills Association (APTMA) has told that government's actions are not matching with its words
for the textile industry. Prime Minister Yusuf Raza Gilani said at the © Research Journal of International
Studies - Issue 14 (May, 2013) 23, high of the textile industry influence towards the countries economy.
Chairman APTMA Tariq Mahmoud said the federal budget 2009-10 is a total negation of the
acknowledgement of the role of textile industry on the part of the Prime Minister. According to him,
reintroduction of minimum tax on domestic sales would invite unavoidable liquidity problematic areas,
which is already reached to the alarming level. He said that textile industry has negative generation of
funds because of high rate of interests and mark ups.

Increasing Cost of Production:

The cost of production of textile rises due to many reasons like increasing interest rate, double digit
inflation & deteriorating value of Pakistani rupee. The above all reason increased the cost of fabrication
of textile industry which construct problem for a textile industry to compete in international market.

Political instability and internal issues of Pakistan:

Pakistan has been a victim of Political instability which is also a great issue of having energy crisis and
severe adverse balance of payments. Pakistan's textile industry is going through one of the hardest period
in decades. The global recession which has hit the global textile really hard is not the only reason for
concern. The high cost of production subsequent from an instant increase in the energy costs.
Depreciation of Pakistani rupee during last years raised the cost of imported inputs. In addition, double
digit inflation and great cost of financing has extremely affected the growth in the textile industry.
Pakistan's textile exports have gone down during last three years as exporters cannot effectively sale out
their products since buyers are not willing to stay in Pakistan due to adverse travel advice-giving and it is
getting more and channels of distribution are becoming harder.

Pakistan is facing energy crisis due to which volume of exports is being contracted and hence economy of
Pakistan is going downward.

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Energy Crisis:

Electricity Crisis:
Due to electricity crisis and load-shedding the textile production capacity of various sub-sectors has been
reduced by up to 30%. The joint meeting of APTMA & other related organization was held at APTMA
House to verbalize a joint strategy to address the alarming electricity crisis being faced by the textile
industry. In this meeting it was decided that a joint working constitute will be formed. The joint working
group will meet soon to design a detailed plan to pursue the following Achievements; immediate total
freedom from Electricity load shedding for the textile industry value chain; Rationalization and reduction
of electricity tariff. The load-shedding of electricity cause a rapid decrease in production which also
reduced the export order. The cost of production has also risen due to instant upturn in electricity tariff.
Due to load shedding some mill owner used alternative source of energy like generator which increase
their cost of production further. Other health and environment problems also generated in this way. Due
to such dramatic situation the capability of competitiveness of this industry in international market
affected badly. Our consumption of Electricity is more than our production.

Gas Shortage:
Despite an important increase in temperature, there was a continuous Gas load-shedding in Punjab and
NWFP. An Analyst for the All Pakistan Textile Mills Association (APTMA) claimed that 60 to 70% of
the industry had been affected and was incapable to accept export orders coming in from everywhere the
world. He said the textile industry had already undergone over 45 days of gas stoppage over a long time
period. Hence Pakistan has faced extra ordinary production losses. He described that supply disturbance
only was causing an estimated loss of Rs1 billion per day in Punjab. He advised that government should
apply planned investments regarding gas shortage and follow the remedies to overcome this issue as soon
as possible.

Tight Monetary Policy:

Tight monetary policy is another cause of intensive increase in cost of production. Due to high interest
rate financing cost upsurges which cause a severe result on production. The withholding tax of 1% also
affects the production badly. The high cost of doing business is because of rigorous increase in the rate of
interest which has increased the problems of the industry and there is a lack of export orders. The
government should take speedy measures to eliminate slowdown in the textile sector.

Removal of subsidy on Textile sector:

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The provisions of Finance Bill 2013-17 were not textile industry openhearted at all. Provisions like
reintroduction of 0.5% minimum tax on domestic sales, 1% withholding tax on import of textile and
articles etc. are nothing but last strict on industry's back. Re-establishment of minimum tax on domestic
sales would offer inevitable liquidity problem, which is already reached to the shocking level. The textile
industry was facing negative generation of funds due to unaffordable markup rate and non-cooperation of
government...

Lack of new investment:

Pakistan textile industry is facing problem of Low yield due to its obsolete textile machineries. To
overwhelm this problematic situation and to stand in competition, Pakistan Textile Industry will require
high investments. There is an unceasing trend of spending in spinning since many years. Pakistan's textile
industry estimates that around Rs1, 400 billion (US$32 billion) of investment was required till 2010 in
order to achieve the government's export target." Pakistan is facing externally as well as within the
boundary problems which restrict the new investment. The unpredictable internal situation of Pakistan
and political instability causes a rapid decrease in foreign investment. This has an adverse effect on
industries specially textile industry which is the major portion of Pakistan industry.

Raw material Prices:

Rapid increase in the raw material prices also creates a problem of high cost of production. Prices of
cotton & other raw material used in textile industry fluctuate swiftly in Pakistan. The rapid increase in the
price raw material affects the cost of production badly and hence production is not made to the
requirements. The increase in raw material prices alters rapidly due to double digit inflation & unbalanced
internal condition of Pakistan. Due to increase in the cost of production the demand for export & home as
well decreased. Hence the unemployment level will also increase. Govt. should take serious step to
survive the textile industry. In order to decrease the price raw material for textile we need to increase our
manufacture capability.

The Consequences of Global Recession on Textile Industry:

The term 'recession' means "The reduction of a country's Gross Domestic Product (GDP) for at least two
quarters; or in normal terms, it is an age of cheap economic activity."

Pakistan is 26th largest Country in the world, and 47th largest in terms of the dollar. It is very critical and
poor position. Pakistan is actually a very economically diverse country with boasting industries of
textiles, agriculture, etc. The foremost reason for this crash has largely been the political unpredictability
and instability over the past few years; no proper economic policies were fulfilled; at last all of them
failed. This caused a very high rate of inflation, which, in 2008, had increased to a massive 25% as

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compared to a 7.9% of 2006 and now in 2012 it is 12.3%. The value of the Rupee worn-out from 60-1
USD to 80-1 USD in only a month, the prices of commodities soared through the roof. The economy in
Pakistan currently facing the following major problems:

 Decline in economic growth

 Rising in inflation
 A growing fiscal deficit
 Political instability
 Suicide attacks

Growth has reduced in 2013-17 is 5.8% due to poor enactment of Agriculture sector in major crops like
WHEAT & COTTON that contributes 20% & 4% respectively in economic growth. This situation of the
economy badly affected the textile industry. The demand for textile product cut down locally &
internationally as well. The export order abridged due to unpredictable conditions of Pakistan & political
instability.

Double Digit inflation:

Inflation can be define as,

"An increase in the price of a basket of goods and services that is representative the economy has whole".

Inflation rate is measured as the change in consumer price index (CPI).Inflation is basically a general rise
in the price level. It is decline in the real value of money. Inflation can have adversarial effect on
economy. Pakistan is one of prey of inflation. It still faces high double digit inflation. The increase in
inflation causes the intensification in the cost of production of textile good which return in downsizing.
The double digit inflation causes drop in exports of textile.

Unemployment Caused by Textile:

The unemployment rate in 2006 was 6.6 per cent which decreases 0.1 percent in 2007. The
unemployment rate spreads to 7.5 per cent in 2008 due to global crisis. As the LSM decrease the
production that's why the unemployment level rises very rapidly. The rise in unemployment level is 11
per cent in 2009. The unemployment rate in textile industry was very extraordinary during the current
fiscal years because of recession & increasing cost of inputs & changing situations of country.

Lack of Research & Development in Industrial Sector:

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The lack of research & development in the industrial sector of Pakistan has resulted in low quality of
export oriented goods like cotton, in comparison to rest of Asia. Because of the subsequent low
profitability in cotton crops, farmers are flowing to other cash crops, such as sugar cane. It is the lack of
proper research and development that has led to such a state. They further accuse cartels, especially the
pesticide sector for enhancement in production. The pesticide sector stands to benefit from stunting local
criteria as higher yield cotton is more pesticide resistant.

United States & EU cuts imports of textile from Pakistan:

United States cancel more than 50% of textile orders of Pakistan .US also execute a high duties on the
import of textile of Pakistan which upshot the export in a bad manner. US & EU are the major importer of
Pakistan textile which generates a huge difference in export of Pakistan textile after imposing a restriction
on import of Pakistani textile goods and fabrics.

Lack of Modernize Equipment:

It can be seen that the textile industry has obsolete equipment and machinery. The inability of Pakistan
govt. to timely modernize the equipment and machinery has led to the decline of Pakistani textile
competitiveness. Other Asian countries have more modernize equipment and technology. Due to obsolete
technology the cost of production is higher in Pakistan as compared to other countries like India,
Bangladesh & china.

Conclusion:
To conclude I would like to comment that exports have direct relation with the GDP while imports have
indirect relation with GDP of Pakistan. More exports would give more GDP and less export will form less
GDP. On the other hand, low imports would give high GDP and above mentioned causes of low export of
Pakistan diminishes our exports and increase our imports. For this purpose Government should control all
these above crises to increase export and decrease our import. Interest free loan should be provided to the
minor scale organizations to make rise in their productivity. Taxes should be cuts for the exporter country
and taxes should be improved for importer companies to decrease the import.

Suggestions and Recommendations:

If we want to make a rapid growth in Pakistan economy then it is necessary to reduce its imports and
increase in exports. But in Pakistan the situation is reversed. The relationship between exports and
economic growth is positively correlated but the relationship of imports and economic growth is
negatively interrelated. If net exports are of positive value, the nation has a positive balance of trade. If
they are having negative value, the nation has a negative trade balance. Fundamentally every nation in the
world wants its economy to be bigger rather than smaller. That thing emphasizes that no nation wants a
negative trade balance.

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