Pakistan’s exports to major European markets have slowed down during the first nine months of the current fiscal year, even though the country enjoys Generalized Scheme of Preferences Plus (GSP+) status from the European Union. This situation has raised concerns among exporters and policymakers.
According to official data, exports to European countries during July-March 2025-26 grew by just 0.94 percent to $6.86 billion, compared to $6.79 billion in the same period last year. According to experts, this slight increase actually reflects a slowdown in export momentum, especially due to reduced demand in northern and western Europe.
Western Europe, which includes Germany, the Netherlands, France and Belgium, accounts for the largest share of Pakistan’s exports.
However, exports to this region recorded a decline of 3.14 percent, falling from $3.41 billion to $3.30 billion. Exports to Germany fell by 2.97 percent to $1.24 billion, to the Netherlands by 1.78 percent to $1.1 billion, to France by 2.62 percent to $411.89 million and to Belgium by 4.73 percent to $402.86 million.
A slight decline was also seen in Northern Europe, where exports fell by 0.85 percent to $557.31 million. In contrast, some improvement was seen in Southern and Eastern Europe. Exports to Southern Europe increased by 6.47 percent to $2.43 billion, while to Eastern Europe increased by 5.06 percent to $566.92 million.
Significant increases were seen in Spain and Italy, where exports increased by 7.44 percent and 4.26 percent respectively.
Analysts say that changing global trade conditions are a major reason for the slowdown. The ongoing tensions in the Middle East, especially the conflict between the US and Iran, are affecting the global supply chain, which is affecting the access of Pakistani products to European markets.
Moreover, the European Union’s granting of preferential trade access to India has also made competition tougher for Pakistani exporters, especially in the textile sector. At the same time, the EU has made GSP+ status conditional on human rights and other conditions, raising questions about the continuation of this facility in the future.
Exporters are currently facing a dual challenge: on the one hand, a decline in demand in the global market and on the other hand, rising production costs at the local level. Rising energy prices and inflation are also affecting the purchasing power of European consumers, which may further pressure the demand for Pakistani products.
Experts say that if the government and exporters do not adopt an immediate strategy, Pakistan’s share in European markets may decrease further.
