Commerce Ministry cites anti-export taxes, high energy and financing costs; Afghanistan tensions wipe out $850 million, US-Israel-Iran conflict threatens $600 million GCC exports
The Ministry of Commerce on Tuesday acknowledged that Pakistan’s exports have remained stagnant at $25 billion to $30 billion for nearly two decades despite the government’s $60 billion Uraan export target, citing anti-export taxes, high energy and financing costs, limited access to finance and weak trade facilitation, while Afghanistan tensions have caused $850 million in exports and transit losses and the US-Israel-Iran conflict threatens another $600 million in exports to Gulf Cooperation Council markets.
According to news reports, the matter was taken up during a meeting of the National Assembly Standing Committee on Commerce, chaired by Muhammad Jawed Hanif Khan, where a calling attention notice on the country’s export performance was discussed.
Aliya Kamran, who moved the calling attention notice, questioned why exports had not shown growth more than a year and a half after the launch of the Uraan programme.
The Secretary, Ministry of Commerce, told the committee that export growth depended on two main factors: competitiveness and productivity.
He said competitiveness required a lower cost of doing business, including affordable inputs, reduced energy costs, cheaper transport, lower financing costs and a supportive tax structure.
The secretary said Pakistan’s commitments under the International Monetary Fund (IMF) programme limited the room for tax reductions, adding that export-related taxation would have to be assessed alongside other economic priorities.
He said productivity was also necessary for firms to compete in global markets, particularly when exporters faced structural constraints.
In a written submission, the Ministry of Commerce said Pakistan’s cost of doing business was being increased by an anti-export bias in the tax system, limited access to finance, high energy costs and weak trade facilitation.
The ministry said inadequate trade facilitation measures had increased compliance burdens and transaction costs for exporters.
Separately, an official document of the Ministry of Commerce on the impact of the Iran and Afghanistan conflicts on Pakistan’s international trade said tensions with Afghanistan had caused losses of $850 million in exports and transit earnings over seven months.
The document said Pakistan’s border with Afghanistan had remained closed since October 11, 2025, stopping all trade with Afghanistan and countries in the region through the Afghan corridor.
It said more than 7,500 transit containers were stranded at seaports and border crossing points with Afghanistan.
Trucks carrying bilateral and transit cargo also remained stuck on both sides of the border, causing losses to traders dealing in fruits and vegetables.
The document said Pakistan had lost exports of pharmaceutical products, cement, processed food, tractors and motorcycles due to the closure.
It added that transporters on both sides had also suffered losses.
According to the ministry, Pakistani transporters earn an average of $200 million annually from Afghanistan and Central Asian Republics transit, which has stopped.
The document said efforts were underway to start Central Asian transit through the Iranian corridor.
The ministry also warned that the US-Israel-Iran conflict could reduce Pakistan’s direct exports to Gulf Cooperation Council (GCC) markets by $600 million over three to six months.
It said the conflict had disrupted Pakistan’s trade with GCC countries and increased logistics costs for other regions.
The document said sea and air routes had been disrupted, particularly through the Strait of Hormuz, while higher energy prices were expected to increase Pakistan’s import bill.
It said the direct impact on UAE logistics was severe for Pakistan because 80% of the country’s trade with GCC markets passed through Jebel Ali port.
According to the document, most international shipping lines suspended operations between Pakistan and GCC markets in March, although some resumed operations in April.
Pakistan National Shipping Corporation (PNSC) oil tankers are bringing petrol from Saudi Arabia and the UAE.
PNSC’s small commercial vessel also started operations from Karachi to Khorfakkan on May 18, 2026.
The document said air logistics recovered in April 2026 after cancellations reached 30% in March.
The ministry said the conflict could affect local production and global export competitiveness if logistics and energy costs remain elevated.
