Pakistan-Arab Trade Nexus: Strengthening Regional Stability in a Multi-polar World
The trade alliance between Pakistan and the Arab world has evolved over the decades. With strong religious and historical ties they have strengthened their economic and ideological partnership. These financial and ideological partnerships involved GGC countries, which were modern national states between 1927 and 1971, whose political regimes were all hereditary autocracies, and Pakistan, founded in 1947 and considered a republican system of the pre-modern era. The Gulf Cooperation Council (GCC) countries, such as Oman, Qatar, Saudi Arabia, Kuwait, and the United Arab Emirates (UAE), played a significant part in forming the trade structure of Pakistan; moreover, they also served as an essential source of energy suppliers and increased markets for Pakistani exports. After the shift in the global economy, the trading structure between Pakistan and the Arab world has been redefined, shaping the region’s strategic and commercial prospects.
Dynamics of Pakistan’s Contemporary Trade Landscape
According to Pakistan’s trade portfolio, Middle Eastern countries are poised to help Pakistan build a strong development in the trading sector. In Fiscal Year (FY) 2024, Pakistan’s export market increased to US$3.15 billion, and the Arab regions have significantly increased, which helps them in increasing their exports by more than 35%. Furthermore, Pakistan’s imports from Middle Eastern countries also stood at over US $11 billion, indicating that Pakistan’s high import dependence creates a persistent imbalance in the trade sector.
The Gulf countries supply Pakistan with valuable products, such as petrochemicals, LNG, crude oil, refined petroleum, and other essential items – the necessities of life. However, Pakistan also exports high-quality products to the Gulf region, including apparel, leather goods, agricultural products, processed foods, and textiles. Thus, these imbalances between the two countries strengthen their strategic alliances and also accentuate the coalition between Pakistan and the Gulf states.
Pakistani Diaspora Support in Gulf Trade
Pakistan produces high-quality, valuable products, and the Gulf States are the primary importers of leather items, rice, textile goods, and fruits. Pakistan is known as one of the prominent sellers of these products. Importing these goods from Saudi Arabia and other Middle Eastern countries is among Pakistan’s major import categories. In 2024, Pakistan’s exports to the Gulf States increased significantly to US$2.08 billion; at the same time, its exports to Saudi Arabia reached US$710 million. This shows that Pakistan’s exports grow by approximately 40% annually.
Rice is one of Pakistan’s export items to Saudi Arabia, along with perishable items such as oranges and mangoes. Moreover, Pakistan, as a Muslim country, is highly recommended for halal-certified products, and it’s most recent export products are pharmaceuticals and IT services, which further help Gulf countries expand their markets.
Pakistan’s Import Market from Arab Regions
The Middle Eastern countries have a robust import market that supports Pakistan’s overall trade; approximately 60% of its fuel and oil is imported from the Gulf States. Kuwait and Saudi Arabia are the largest exporters of crude oil; however, Qatar supplies LNG through long-term agreements. Thus, in Fiscal year 2025, imports from the Arab regions to Pakistan increased to US $11.44 billion due to global oil price hikes and rising local energy demand.
Future Prospects of Pakistan’s Trade Agreements
Three main aspects support the Pakistan-Arab economic relationship in the future.
1) Pakistan- GCC free trade agreement – which helps Pakistan to open new export markets; however, its import sector might be exposed to cheaper imports, which needs to be managed adequately.
2) Energy dependence, which shows the economic stability in Pakistan.
3) Narrow export bases of Pakistan – due to limited export bases, Pakistan falls under the competitiveness.
The trading relationship between Pakistan and the Gulf states is more akin to an economic relationship. The strategic alliances of both countries are deeply rooted in their interdependence and history. Furthermore, Pakistan’s export market is potentially over time, but its persistent energy imports have created a larger shortfall that needs to be managed. Thus, by focusing on valuable additions, industrial modernization, and policy stability, Pakistan can transform this relationship into a balanced, sustainable economic future for both countries.
