Dr. Ikramul Haq & Abdul Rauf Shakoori
The humanity at large finally had a sigh of relief on May 10, 2025, following a brokered ceasefire between the two nuclear-armed neighbours of South Asia, India and Pakistan. As highlighted by President Donald J. Trump, the breakthrough was the result of intense diplomatic efforts initiated after his team purportedly received an alarming intelligence. A core group of top US officials, including Vice President JD Vance, Secretary of State and interim national security adviser Marco Rubio, and White House chief of staff Susie Wiles, “while declined to describe the nature of the information, citing its sensitivity, they said it was critical in persuading the three officials that the US should increase its involvement”, according to CNN.
According to the Washington Post, “four nerve-racking nights, missiles and drones streaked across the skies of major cities in India and Pakistan, as the nuclear-armed neighbors appeared to be sliding toward all-out war”. The most recent escalation, rooted in a long history of unresolved disputes and military posturing, intensified when India launched BrahMos missiles across Pakistan’s sovereign airspace, a move that received immediate and proportional response.
Pakistan’s retaliation, grounded firmly in Article 51 of the UN Charter, highlighted its adherence to international law and its capability to respond with strategic discipline. The conflict erupted after Indian unprovoked and unjustified airstrikes from May 7–10, 2025, in response to a terrorist incident in Pahalgam on May 2, 2025, which Pakistan categorically denied being involved.
The strikes led to tragic civilian casualties, including women, children, and the elderly, as well as damage to religious landmarks. Pakistan demanded an impartial international inquiry into the Pahalgam attack, an offer India refused, further exposing the diplomatic chasm between the two countries. President Trump’s intervention was instrumental not only in de-escalating the immediate conflict but also in steering the dialogue toward peace and trade.
President Trump’s trade offer, positioned as a historic economic opening, included a commitment to increase market access for Pakistani goods, eliminate certain tariff barriers, and initiate investment programs in high-tech sectors, agriculture, and textiles.
The opportunity arrived at a critical juncture for Pakistan, especially considering the comparative data reflecting the current trade dynamics between the United States and South Asia. The total USA’s exports to Pakistan in 2024 amounted to US$2,135 million, while imports from Pakistan reached US$5,124 million, resulting in a negative trade balance of US$2,989 million in favour of Pakistan. The ranking of Pakistan in USA exports stood at 65, representing a 0.1 percent share, while its ranking in imports was 57, accounting for 0.2 percent of total USA imports.
The combined two-way trade ranked Pakistan at number 60. USA exports to Pakistan supported around 12,000 jobs in 2022, indicating that trade ties, although modest, already contributed meaningfully to both economies.
The trade structure between the two countries highlights that USA imports from Pakistan were led by apparel (US$1,888 million), textile furnishings (US$1,374 million), miscellaneous manufactured commodities (US$251 million), knit apparel (US$249 million), and fabrics (US$189 million).
On the export side, the USA provided Pakistan with other agricultural products worth US$774 million, waste and scrap valued at US$454 million, aerospace products and parts totaling US$99 million, basic chemicals amounting to US$63 million, and coal and petroleum gases worth US$56 million. The trade pattern reveals that Pakistan continues to be a vibrant supplier of labour-intensive manufactured goods, while the USA remains a source of high-tech, industrial, and agricultural materials.
The comparison with India, however, paints a revealing picture. The USA exports to India in 2024 stood at US$41,753 million, while imports surged to US$87,416 million, producing a massive trade deficit of US$45,664 million. India ranked 13th in USA exports and 10th in its imports, with its share of exports at 2.0 percent and imports at 2.7 percent.
The bilateral trade relationship ranked India 10th overall in USA two-way trade. The USA exports to India supported 114,000 American jobs in 2022. This disparity reflects not only India’s larger market size but also a sustained and favourable policy framework that has consistently benefited from USA engagement.
The top Indian export items to the USA included pharmaceuticals and medicines (US$13,071 million), miscellaneous manufactured commodities (US$12,292 million), communications equipment (US$8,895 million), apparel (US$4,722 million), and textile furnishings (US$3,992 million).
The leading USA exports to India were oil and gas (US$7,884 million), miscellaneous manufactured commodities (US$3,355 million), coal and petroleum gases (US$3,160 million), aerospace products and parts (US$3,010 million), and basic chemicals (US$2,336 million). The scale of trade highlights a deeply entrenched economic partnership that Pakistan now seeks to mirror through strategic re-engagement and policy reform.
The product-wise data for 2023 and 2024 reveals that Pakistan’s exports to the USA in key sectors remain significantly lower than India’s. In medical equipment and supplies, Pakistan’s exports increased from US$129.0 million to US$133.9 million, compared to India’s rise from US$195.8 million to US$211.0 million.
Rubber product exports from Pakistan to USA rose to US$36.0 million, dwarfed by India’s US$965.1 million. In the cutlery and hand tools category, Pakistan recorded US$33.4 million compared to India’s US$391.3 million.
Pakistan’s plastic products exports amounted to US$24.1 million against India’s US$876.6 million. Similar disparities were seen in footwear (US$15.5 million versus. US$435.0 million), leather products (US$23.5 million versus US$495.4 million), fruits and tree nuts (US$1.8 million versus US$57.0 million), and dairy products (US$1.6 million vs. $43.9 million).
The agricultural sector has particularly suffered due to inconsistent trade access and non-tariff barriers imposed by USA authorities. Pakistani flour, rice, and fresh produce such as mangoes often face stricter phytosanitary and certification standards compared to those from other countries. These barriers have constrained the growth of Pakistan’s agro-exports, despite the country producing world-class varieties that can compete on both quality and pricing. The government of Pakistan must negotiate equal treatment and establish conformity protocols that are aligned with global best practices.
The workforce potential of Pakistan has also long been underutilized in USA labour and talent acquisition programmes. While India has benefited from large-scale visa facilitation, corporate hiring, and academic exchange partnerships, Pakistan’s skilled professionals have faced systemic neglect.
The tech and engineering graduates from Pakistan have repeatedly demonstrated superior performance in global competitions, research contributions, and start-up ventures. The USA should reframe its human capital policy to include Pakistan as a priority nation for skilled immigration, tech partnership, and research collaboration.
The broader engagement strategy for Pakistan must now include proactive trade diplomacy. The leadership in Islamabad must leverage its geopolitical positioning and economic potential by fostering ties with the European Union, Gulf nations, China, and Russia.
The economic diversification must include bilateral and multilateral trade pacts that expand market access. China must be engaged not only as an economic collaborator but also as a defense partner, reinforcing regional security and economic integration.
The proposed USA-Pakistan trade deal must be designed to include preferential access to American markets, technical assistance in quality and standards compliance, and direct investment in Pakistan’s logistics, IT parks, and industrial zones. The U.S. tech giants and top universities should be incentivized to set up campuses, innovation hubs, and R&D centers in cities like Karachi, Lahore, and Islamabad. Such measures would strengthen educational infrastructure, spur entrepreneurship, and cultivate a knowledge-based economy.
The way forward for Pakistan’s economic resilience lies in its ability to combine IMF-prescribed reforms with homegrown innovation and diplomatic outreach. The recent approval of the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) by the IMF confirms global financial endorsement. The structural benchmarks on monetary policy, fiscal consolidation, and energy sector reforms are essential for long-term stability. The success of these programmes requires continuity, transparency, and political consensus.
The vision for a prosperous Pakistan must rest on inclusive growth, regional integration, and human development. The path to becoming a regional economic hub demands focused investments in infrastructure, trade facilitation, and digital transformation. The USA-Pakistan trade partnership offers a renewed opportunity to reverse historical neglect, unlock mutual potential, and deliver tangible relief to the citizens of Pakistan. The government must act decisively to seize this moment and transform economic diplomacy into national prosperity.
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Dr. Ikramul Haq, an advocate of the Supreme Court and writer is an adjunct faculty at Lahore University of Management Sciences (LUMS). Abdul Rauf Shakoori is a corporate lawyer based in the USA.