IN the light of the evolving political environment in Bangladesh, the bilateral relationship between Pakistan and Bangladesh is showing signs of normalisation. Both countries have initiated efforts to tapinto their existingpotential and build a sustainable and cooperative relationship, particularly in trade and industrial sectors. These steps mark a fresh beginning in rekindling ties that have long remained underutilised.

At present, bilateral trade between the two countries stands at around $700 million annually; far below its actual potential. Trade growth has been sluggish in recent years, averaging less than five per cent annually.

During the 2023-24 fiscal, Pakistan exported goods worth $661 million to Bangladesh, while imports stood at just $57 million; a sharp decline from over $90 million in 2021.

In 2022, Pakistan`s exports had peaked at $839 million, the highest in a decade, but have since fallen steadily. Between July and November 2024, Pakistan`s exports to Bangladesh were recorded at $314 million, whereas Bangladesh`s exports to Pakistan reached only $31 million.

Efforts are underway to raise the bilateral trade volume to $3 billion within the next three years. Achieving this goal will require several measures, including the signing of a free trade agreement (FTA) or at least a preferential trade agreement (PTA), exploring untapped sectors, and improving transport and logisticsinfrastructure.

Addressing tariff and non-tariff barriers is essential to facilitate smoother trade.

Considering that Bangladesh`s total global exports crossed $50 billion in 2024 while its imports were over $70 billion, Pakistan has ample opportunity to expand its trade share in the Bangladesh market.

Opportunities abound in the export of Pakistani machinery and engineering goods to Bangladesh. Pakistan is well positioned to supply machinery for sugar, cement and chemical industries.In addition, Bangladesh has a growing demand for light engineering products.

Pakistani industries are well suited to meet this demand. Historically, Pakistan has provided railway coaches and rolling stock to Bangladesh, and this cooperation could now be revived and expanded.

Bangladesh`s sugar industry presents another key area for collaboration. With 15 state-owned sugar mills and plans for modernisation, the sector offers significant export prospects for Pakistan.

Pakistan alsohas a track record of supplying machinery to the cement sector in Bangladesh. Building on such experiences, Pakistani companies can pursue joint ventures in both the sugar and cement sectors to provide technology upgrades and management expertise.

Currently, Pakistan`s major exports to Bangladesh include textiles, mineral products, machinery and chemical goods.

In return, Pakistan imports jute, raw tobacco, textile fibres and scrap vessels.

There is scope to significantly increase Pakistani exports of rice, steel, marble, ceramics, sports goods and surgical instruments, while Bangladesh could boost its exports of leather goods, tea, plastic products, and ready-made garments.

Joint ventures in information technology, pharmaceuticals, and chemicals could also play a transformative role in deepening economic cooperation.

To fully capitalise on these prospects, Pakistan must pursue a proactive and sustained engagement strategy.

Reactivating the long-dormant PakistanBangladesh Joint Economic Commission (JEC) is essential for facilitating dialogue and advancingshared goals.

If supported by strong and continued political will and strategic focus, the future of Pakistan-Bangladesh economic relations appears promising, with the potential to contribute meaningfully to regional stability and mutual prosperity.

Hussain Ahmad Siddiqui Islamabad