Pragmatism is finally taking over. The opening of direct trade between Pakistan and Bangladesh for the first time could be a watershed moment in their economic relationship. Ever since the ouster of Sheikh Hasina and her Awami League government last year, both sides have engaged in meaningful dialogues at all levels, effectively cutting through more than five decades of political baggage. It is a major step forward.
Pakistan’s first direct shipment of 26,000 metric tons of rice, with another 24,000 metric tons on the way, marks the beginning of a fruitful economic partnership. Direct shipping routes and cargo flights are being discussed and Pakistani business delegations have been visiting Dhaka for the past two months. It shows their shared interest in growth. Moreover, trade between the two has already crossed $1 billion and has a massive potential ahead.
Yet, the opportunities can be fleeting if not seized. Pakistan’s economy has been under pressure despite its valuable exports. However, it has the potential to satisfy Bangladesh’s needs for quality raw materials and products at competitive prices. Pakistani exporters cannot afford to overlook this golden opportunity to tap into a growing market, given the fact that the new Bangladeshi government, too, is looking for reliable trade partners.
Both South Asian countries must handle these complexities with care and pursue a future-focused approach to make the best of their new relationship. Together, they have a good chance of reshaping not just their economic futures but also contribute to regional growth
However, seeking a free-trade agreement at this stage may be overly ambitious. Efforts in this direction have been afoot since 2002, but Dhaka wants free access to Pakistan‘s markets in exchange, citing its status as a least developed country (LDC). This status was supposed to lapse in 2024, but the country is now expected to graduate in 2026. At the same time, Bangladesh wants to protect its own industry and has always insisted on a negative list approach. The same demands are likely to pop up, and Pakistan is in no position to give unconditional access to any country, especially when the gesture is not reciprocal.
Both South Asian countries must handle these complexities with care and pursue a future-focused approach to make the best of their new relationship. Together, they have a good chance of reshaping not just their economic futures but also contribute to regional growth.
Political differences are there, but the notion that “world runs on trade, not emotions” rings particularly true here. Both sides must engage strategically while prioritizing economic collaboration and focusing on mutual benefits. They must bear in mind that prospects of economic growth can be maximized even without complete agreement on all issues.
