Trade Between Pakistan and other Countries of the World

Trade in World

Trade between Pakistan and other countries of the World

Pakistan is basically a producer of food and raw material. The composition of its imports and exports is reflected in its foreign trade.

The balance of trade in Pakistan is negative which means its exports fall short of its imports.

Every country of the world in spite of being highly developed cannot be self-sufficient in meeting all its needs and requirements. It has to buy different commodities from other counties and has to sell its surplus things to those countries. This process takes place within the country as well as outside the country. The buying and selling and exchange of goods is called TRADE. 

The Trade, which takes place within the country is called INTERNAL or DOMESTIC trade. The trade, which takes place between the two countries, is called EXTERNAL or INTERNAL trade. Trade has two factors one is buying and the other is selling. Those goods, which are sold to other counties, are called EXPORTED goods and this trade is called export. Those goods, which are bought from other countries are called IMPORTED items and the exchange of these goods is called import.

Every country manages its trade through import and export. There are two kinds of trades. Firstly trade goods are purchase on cost. Secondly, trade goods are exchanged for good. This kind of trade is called “BARTER TRADE”. Both kinds of trade are going in the world.


Foreign exchange is the money obtained through external trade. Mostly it is used for American dollars and British pounds. The currency of every country is different and so the exchange takes place on the basis of some mutually agreed currency. In Pakistan trade mostly takes place in the American dollar or British pounds. This money obtained from external trade is FOREIGN EXCHANGE. If a country produces any commodity exactly according to its needs or more that country is called SELF-SUFFICIENT in that particular commodity. For example, if Pakistan produces wheat according to requirements and more than requirements then Pakistan will be called self-sufficient in wheat. In any country, if goods are produced less than the requirements of the country then that country is called a low producer o that commodity, and if that country produces a commodity in abundance then it is called a high producer of that commodity. However, every country aspires to be self-sufficient to avoid unnecessary imports. Even it rise to produce more for export to earn foreign exchange.