Pakistan and the United Arab Emirates (UAE) share a deep-rooted relationship based on cultural, religious, and economic ties. Over the years, the UAE has emerged as one of Pakistan’s most significant trading partners, with a substantial share in the country’s export market. This article explores the scope, key products, and challenges in Pakistan’s exports to the UAE.
Key export categories
The UAE is a vital destination for Pakistani goods, with exports encompassing a diverse range of products. Some of the major export categories include:
Textiles and apparel: Pakistan’s textile industry is a cornerstone of its economy, and the UAE is a major importer of Pakistani fabrics, garments, and home textiles. High-quality and competitively priced products attract UAE buyers to Pakistan’s textile sector.
Food and agriculture: The UAE relies heavily on imports for its food supply. Pakistan exports rice, fruits (particularly mangoes and citrus), vegetables, and seafood to meet this demand. Pakistani Basmati rice enjoys a significant reputation in the UAE market.
Meat and livestock: The UAE’s halal food market creates a strong demand for Pakistani beef, mutton, and poultry. With a robust halal certification system, Pakistan is well-positioned to cater to the UAE’s dietary needs.
Mineral and petroleum products: Pakistan also exports minerals such as gypsum and limestone to the UAE. Additionally, refined petroleum products form a part of the export portfolio.
Surgical instruments and pharmaceuticals: High-quality surgical instruments and a growing pharmaceutical industry have allowed Pakistan to carve a niche in the UAE’s healthcare sector.
Apart from the above, there are two areas which could lead volume of Pakistani exports to UAE surpass the $2 billion level; one is olive production and the second is IT exports.
Olive production
Pakistan can become self-sufficient in edible oil within a decade if the immense potential of olive farming and millions of wild olive trees across Pakistan is realised. If harnessed to its full potential, indigenous olive oil production in the country can help save a staggering $4.5 billion spent annually on importing edible oil and lead to a thriving olive export market. About 5.6 million new olive trees across 50,000 acres of land in Sindh, Balochistan, Khyber Pakhtunkhwa, and Punjab planted in the past few years. Two million of these plants are already yielding fruit and producing several tons of olive oil for local consumption and export.
IT exports
Pakistan is being officially being promoted as a key tech destination and a special conference GITEX had been organised in UAE to boost connectivity and cooperation with the country’s information technology sector. Pakistan’s IT exports to the UAE had surged 34% since last year’s GITEX, underscoring the exhibition’s importance. This platform is especially important for highlighting the IT skills of Pakistani youth on a global stage. Pakistan had been recognized as the “Tech Destination of the Year 2024” by Gitex Global, marking a significant achievement for the tech industry. The potential for Pakistan’s IT exports, which currently stand at $3.2 billion, could reach at least $30 billion in the years to come.
According to the latest data, Pakistan exported goods worth approximately $1.5 to $2 billion to the UAE in the last fiscal year. The UAE consistently ranks among the top five destinations for Pakistani exports, making it a crucial partner for trade diversification. Despite strong trade relations, several challenges hinder the growth of Pakistan’s exports to the UAE:
Regulatory barriers
Strict import regulations, including quality and packaging standards, can sometimes limit market entry for Pakistani exporters.
Competition: Pakistani products face stiff competition from other countries such as India, China, and Vietnam, which offer similar goods at competitive prices.
Logistical issues: Inefficient supply chains and higher shipping costs can impact the timely delivery of goods, particularly perishables.
Limited market intelligence: Many Pakistani exporters lack detailed knowledge of UAE consumer preferences and market trends, leading to missed opportunities.
Opportunities for growth
Free Trade Agreements (FTAs): Negotiating preferential trade agreements or leveraging the existing UAE-Pakistan trade frameworks can boost exports.
E-commerce: The growing digital economy in the UAE presents opportunities for Pakistani exporters to market their products online directly to consumers.
Value addition: Enhancing the quality and branding of Pakistani goods, particularly in textiles and food products, can improve competitiveness.
CPEC connectivity: The China-Pakistan Economic Corridor (CPEC) offers improved infrastructure and connectivity, reducing transportation costs and increasing trade efficiency with the UAE.
Pakistan’s exports to the UAE hold immense potential, given the two countries’ strong bilateral ties and the UAE’s position as a global trade hub. By addressing challenges such as competition and regulatory compliance, and leveraging opportunities in e-commerce and trade agreements, Pakistan can further enhance its export volume and diversify its economic base. This partnership not only boosts Pakistan’s economy but also strengthens the broader economic relationship between the two nations.