Pakistan’s trade with the Association of Southeast Asian Nations (ASEAN) has long been described in Islamabad’s economic circles as a relationship full of promise yet stubbornly short of fulfilment. The numbers themselves tell a familiar story: trade volume in 2024 reached $11.5 billion, an improvement on previous years but still a fraction of what officials insist is possible. Behind the headline figure lies a deeper reality of missed chances, structural weaknesses and policy hesitations that continue to define one of Pakistan’s most underdeveloped regional partnerships. Even as the political rhetoric of “Look East” gains renewed life every few years, the fundamentals remain largely unchanged.
Pakistan’s exports to ASEAN stand at just $3.5 billion, dwarfed by the $8 billion in imports flowing the other way. This imbalance, which has widened further in 2025, suggests an economic relationship that is neither equitable nor strategically anchored. Most of the trade is concentrated among five economies — Indonesia, Malaysia, Thailand, Vietnam and the Philippines — a concentration that mirrors the narrow structure of Pakistan’s exports themselves. There is, however, a sincere effort underway to shift the direction of this relationship. Islamabad has pinned considerable hope on a patchwork of trade frameworks that include an existing Free Trade Agreement with Malaysia and a Preferential Trade Agreement with Indonesia, alongside ongoing negotiations for additional FTAs and PTAs with Thailand and Vietnam.
Policymakers argue that these deals offer a pathway to reducing tariffs, improving market access and lowering some of the structural barriers that have long limited Pakistan’s competitiveness in Southeast Asia. Yet agreements on paper are rarely a guarantee of meaningful economic transformation. The real challenge lies in turning these frameworks into functioning channels for investment, technology transfer and value-added exports. Officials in Islamabad frequently emphasize Pakistan’s strategic geography, portraying the country as a natural bridge linking ASEAN to Central Asia, the Middle East, western China and the wider Indian Ocean. It is a familiar refrain — one that has appeared in countless government documents, strategic briefings and speeches. But geography alone cannot drive trade.
Ports that are deep but congested, roads that are long but uneven, and a regulatory climate that remains famously unpredictable do little to assure foreign investors that Pakistan is a market ready to absorb and sustain regional manufacturing networks. If Islamabad truly seeks to present itself as a competitive production base for ASEAN companies, it must address weaknesses in its own business environment with far greater urgency than it has so far demonstrated. Still, it would be unfair to ignore the pockets of progress that have emerged despite these constraints. Pakistan’s exports to ASEAN in 2025 continue to be dominated by textiles — particularly non-knit suits for men and women, knit sweaters, house linens and cotton fabrics — which account for roughly 68 per cent of all shipments.
The remainder is made up of rice, seafood, leather goods and various agricultural items such as pulses and tree nuts. This overwhelming dependence on textiles is both a strength and a vulnerability. It reflects Pakistan’s traditional comparative advantage, but it also exposes the fragility of an export base that has failed to diversify in any meaningful way. Within ASEAN, some markets have responded more swiftly than others. Malaysia has shown the fastest growth in imports from Pakistan, spurred in part by the FTA that facilitates greater movement of textile products, rice and leather goods. Indonesia, which signed a PTA with Pakistan in 2012, continues to deepen its trading relationship, although the potential for expansion remains vast. The Philippines has become an unexpectedly dynamic market for Pakistani goods, especially in textiles and agricultural commodities.
Thailand and Vietnam have also recorded increases, albeit at a slower pace. What is notable in all these cases is that growth has largely been driven by bilateral agreements, Pakistan’s attempts at export diversification and a gradual improvement in value-added production. Sectors such as information technology, processed food products and higher-end textiles are beginning to feature more prominently in trade dialogues, though their presence in export data is still modest. The challenge, once again, is scale: Pakistan’s economy is simply not generating the type of high-value, high-technology exports that Southeast Asian markets typically absorb in volume. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) president, Atif Ikram, recently argued that ASEAN economies hold vast potential for engaging Pakistan’s 250-million-strong domestic market. He is not wrong.
A quarter-billion consumers, many of them young, urbanizing and digitally connected, present a compelling case for ASEAN companies seeking new markets amid shifting global trade patterns. But the promise cuts both ways. Pakistan, too, has much to gain from deeper integration with one of the fastest-growing regions in the world — a region that has successfully drawn investment, built manufacturing capacity and nurtured competitive regional supply chains for decades. What continues to hold Islamabad back is not a lack of opportunities but a chronic inability to align its policy ambitions with long-term institutional discipline. Trade diversification requires sustained investment in quality standards, logistics, research and development, and industrial upgrading — areas where Pakistan has historically lagged.
Domestic political instability, inconsistent energy supplies, and bureaucratic roadblocks have only deepened investor hesitation. The question, then, is whether Pakistan can muster the political will needed to move beyond rhetoric. The government’s desire to attract ASEAN investment into Special Economic Zones under the China-Pakistan Economic Corridor (CPEC) is sensible, but investment will not come merely because incentives are listed on a brochure. Companies from Malaysia, Vietnam, Thailand and the Philippines will need a clearer sense that Pakistan is committed to stable regulation, reliable energy and an environment where factory floor decisions are not held hostage to administrative delays.
If Pakistan is serious about rebalancing its trade relationship with ASEAN, it must begin by addressing the shortcomings at home. No country becomes an export powerhouse by accident. The nations of Southeast Asia did not rise on geography alone; they rose on planning, discipline and the willingness to reform when the old model stopped working. Pakistan stands today at a similar crossroads. It can continue celebrating incremental increases in trade while ignoring a widening deficit, or it can push for a deeper restructuring of its export economy, one that complements — and competes with — the dynamism of its ASEAN partners. The choice remains its own, but time is no longer on its side.
