Pakistan-Bangladesh Warming Ties Raise Trade Imbalance Concerns

A rapid thaw in relations between Bangladesh and Pakistan has intensified questions about the practical rewards for Dhaka, particularly as trade data shows a wide imbalance in favour of Islamabad.

The growing closeness follows years of limited interaction, and observers are now examining whether the new momentum will bring lasting economic and institutional advantages.

Recent months have seen greater people-to-people and official exchanges. A Bangladeshi news website, Daily Wada, reports that air connectivity with Pakistan has expanded, shipments from Karachi are arriving at Chattogram port on a regular basis, scholarship schemes have been unveiled and delegations from both governments and private sectors are visiting more often.

Despite these developments, trade numbers reveal a clear tilt. Pakistan exported goods worth 6.72 crore dollars to Bangladesh in fiscal 2025-26, compared with 7.16 crore dollars in the earlier year. Based on Pakistani central bank data, the ratio stands at roughly 11 to 1 in Pakistan's favour.

The bulk of Pakistan's exports consists of cotton and textile-related raw materials. The report attributes their rising competitiveness to the depreciation of the Pakistani rupee.

Bangladesh has long pressed for tariff concessions on jute and jute products, where it holds a strong international standing. While Pakistan depends almost entirely on Bangladesh for raw jute and jute yarn, higher duties on value-added jute items restrict Bangladeshi exporters from reaching the Pakistani market fully.

Industry representatives say these duty structures have contributed to a significant drop in Bangladesh's jute income from Pakistan over recent years.

Pakistan has publicly set a target for substantially increasing exports to Bangladesh. Bangladesh has not announced a comparable goal for its own exports to Pakistan.

The digital domain presents a mixed picture. Bangladesh outperforms Pakistan on several international digital indices, yet Pakistan has moved ahead in integrating financial institutions, digital wallets and government services into shared platforms.

The report concludes that institutional and technical collaboration may ultimately be more valuable than trade alone. However, Dhaka must navigate these prospects alongside historical disputes, market access challenges and domestic political sensitivities that still shape bilateral ties.