Bangladesh and Pakistan are exploring possibilities and means to boost the existing meager bilateral trade volume between the two countries by easing trade and visa policies.
The efforts to boost bilateral trade was strengthened between the two countries after the fall of Sheikh Hasina-led Bangladesh government in a students-led mass upsurge on August 5, last year.
To boost the bilateral trade Bangladesh recently hosted a trade delegation from Pakistan and announced easing policy for the traders of Pakistan. Both the sides also agreed to form a joint business council, following a green signal from the interim government in Bangladesh.
The Dhaka Chamber of Commerce and Industry (DCCI) has urged the government to negotiate a Free Trade Agreement (FTA) and Preferential Trade Agreement (PTA) with Pakistan to reverse the trend.
At the 'Bangladesh-Pakistan Business Forum' on January 14, 2025, DCCI President Taskin Ahmed emphasized addressing visa complexities and expanding transport links. Pakistani trade leaders, led by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh, proposed joint investments in IT and mobile financing, alongside increasing imports of agricultural goods, ceramics, and rice.
The trading with Pakistan was discouraged over the last 15 years during the regime Bangladesh's former prime minister Sheikh Hasina, traders said.
However, Bangladesh Bank data revealed that the Bangladesh's imports from Pakistan fell to $628 million in fiscal year 2023-24 compared to $699 million in the previous fiscal year.
Pakistan now is the 20th largest exporter to Bangladesh, supplying cotton, chemicals, cement, machinery, and apparel.
Meanwhile, Bangladesh's exports to Pakistan fell from $20.5 million in the first quarter of FY23 to $13.5 million in FY24, placing Pakistan among the lowest-ranked destinations for Bangladeshi goods, according to the central bank.
This trade imbalance highlights significant challenges, including tariff barriers, inadequate connectivity, and limited policy support.
Despite challenges, Bangladesh's central bank projects opportunities for enhanced bilateral trade through improved infrastructure and agreements. Recent policy discussions, including easing visa restrictions and establishing a joint business council, signal optimism. However, competition in textiles and regional trade imbalances remain barriers to significant progress.
As Bangladesh and Pakistan explore collaboration, the data-driven call for reforms and agreements highlights the need for sustained efforts to unlock trade potential and strengthen economic ties between the two nations.