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t Services Imports

The value for transport services (% of commercial service imports) in Pakistan was 57.71 as of 2010. Over the past 34 years this indicator reached a maximum value of 77.12 in 1980 and a minimum value of 36.23 in 2005.

Direction of imports of Pakistan

Pakistan’s major imports are from few countries. Over 40% imports are from only 7 major countries which are the United States of America, Kuwait, Saudi Arabia, Germany, Japan, United Kingdom and Malaysia. Saudi Arabia is upcoming as a main provider towards Pakistan after United States & Japan. The part of United States & Japan, with some ups and downs, showed a decreasing trend because of shift in the imports of raw material & capital goods to other means. Whereas, the part of Pakistan’s imports from Saudia has been due to increased imports of petroleum products. China (15.35% of total imports), Saudi Arabia (10.54%), UAE (9.8%), US (4.8%), Kuwait (4.73%), Malaysia (4.43%), India (4.02%).

Reasons of Increasing Imports

In April of 2012 Pakistan trade deficit was equivalent to 1517 million USD. Pakistan balance of trade remained at an average of (818.60) million American Dollars reaching an all time high of 9.60 million American Dollars during August 2003 and a record stumpy of (1878) million American Dollars during October 2008, historically from 2003 until 2012.Rice, cotton fiber, cement, tiles, marble stones, textile products, clothing, leather products, carpets & rugs and food products are main export of Pakistan. Main Pakistan imports petroleum, machinery, commercial services, transportation tools, edible oil, paper and paperboard, iron and tea. Main trading partners are European Union, China, UAE and US.

Imports of Capital Goods

In order to build up the economy Pakistan had to import and is importing capital goods for rapid industrialization of the country. The heavy import of machinery has considerably increased the import bill and has adversely affected balance of payment.

Import of Oriented Industry

Most of industries which were established for achieving the twin objective of earning and saving foreign exchange have been eating away roughly 31% of aggregate import bill.

Rise in Oil price

The sharp rise in oil prices of oil, particularly in 70’s and also in the beginning of 1980’s and 1990’s in taking a big chunk of the foreign exchange earnings.

Increasing in imports payment for fertilizer

Due to increase in prices of fertilizers, oil and petroleum, there is sharp increase in the import payments to the outside world.

Defense Need

To our defense we purchase modern weapons at a very high cost from different countries, which increases pressure on our balance of trade and it becomes adverse.

Consumption oriented society

Pakistanis are mostly consumption oriented. Due to rapid rise in population and increased consumption habits, the domestic manufactured goods are mostly consumed in the country. Due to this Pakistan can’t fulfill its demand through local production and also the import rise.

Less Modernization of Machinery

Since 1970’s there has been less modernization, balancing and replacement of machinery in the private industrial sector. The fall in production and deterio