Pakistan Exports to Europe Dip Despite GSP+
Pakistan exports to Europe fell in the first quarter of 2026-27, even though the country holds Generalised Scheme of Preferences (GSP+) status with the European Union. Data compiled by the State Bank of Pakistan showed exports to European countries contracted by 1.84 per cent to $2.350 billion in July-September 2026, down from $2.394 billion in the same quarter a year earlier.
The fall was modest overall, but it was uneven. Southern and northern Europe bought more from Pakistan, while western and eastern Europe bought less. Trade analysts linked the decline to the ongoing Middle East conflict and to preferential market access the European Union has offered India, one of Pakistan’s main rivals in textiles.
Where the decline was sharpest
Western Europe remains Pakistan’s largest export region in the EU, covering Germany, the Netherlands, France, Italy and Belgium. Exports to that region shrank by 8.51 per cent to $1.065 billion, down from $1.164 billion a year earlier.
Germany, the single largest market in the group, took $389.116 million worth of Pakistani goods, down 12.77 per cent from $446.100 million. The Netherlands, the second-largest market, fell by 3.07 per cent to $370.005 million from $381.752 million. France slipped by 0.47 per cent to $136.030 million, and Belgium fell by 7.57 per cent to $127.431 million.
Eastern Europe fell faster in percentage terms, dropping 15.05 per cent to $168.761 million from $198.677 million. Italy, counted in the southern Europe figures in the State Bank data, declined by 8.49 per cent to $298.731 million from $326.460 million.
Where exports still grew
Not every European market weakened. Exports to northern Europe rose by 21.07 per cent to $236.321 million from $195.191 million. Southern Europe grew by 5.26 per cent to $879.896 million from $835.862 million, led by Spain, where exports rose 17.78 per cent to $451.244 million from $383.122 million. Greece also grew, rising 3.52 per cent to $34.961 million from $33.774 million.
Outside the EU, the United Kingdom also bought more. Before Brexit, the UK was Pakistan’s major export destination in Europe. In the post-Brexit period, exports to the UK rose 6.64 per cent to $612.305 million in the July-September quarter, up from $574.171 million a year earlier.
Why Pakistan exports to Europe worry policymakers
GSP+ gives Pakistan preferential access to the EU market, which should help exporters compete. The fact that exports still fell in western and eastern Europe has raised concern among policymakers, because those are the markets where Pakistan’s textile and clothing exporters earn most of their European income.
Trade analysts warned that the Middle East conflict could dampen demand further. Rising energy costs are likely to squeeze consumer spending in Europe, which is already under strain from the economic fallout of the Ukraine war. When European households spend less on clothing and home textiles, Pakistani exporters feel the effect quickly, because those goods dominate the country’s shipments to Europe.
The competition point also matters. The EU’s preferential access for India gives a rival textile exporter an edge in the same markets. For Pakistani exporters, that means price and delivery matter even more when demand is weak.
What it means for Pakistan’s exporters
A 1.84 per cent fall in one quarter does not, on its own, signal a crisis. The growth in Spain, northern Europe and the UK shows that demand has not vanished. But the pattern of the fall is the warning: the largest markets weakened, while growth came from smaller ones.
Exporters will watch the next quarter closely. If western European demand stays soft through the winter, the full-year result for Europe could turn negative even if smaller markets keep growing. For now, the July-September figures show a market that is holding in parts of Europe and slipping in the places that matter most.
Feature Pakistan has tracked the European side of Pakistan’s trade before, including cheaper remittance routes for Pakistan’s Europe flows, which matter to the same households that depend on export jobs. The country is also pushing trade ties elsewhere, including a GCC free trade agreement, as a way to widen markets beyond Europe. The figures in this report come from the Dawn report based on State Bank of Pakistan data.
Frequently asked questions
How much did Pakistan exports to Europe fall?
Exports to European countries fell 1.84 per cent to $2.350 billion in July-September 2026, from $2.394 billion in the same quarter of 2025.
Which European region fell most?
Western Europe fell 8.51 per cent to $1.065 billion, and eastern Europe fell 15.05 per cent to $168.761 million. Western Europe is Pakistan’s largest EU export region.
Which markets grew?
Northern Europe grew 21.07 per cent, southern Europe grew 5.26 per cent, and Spain rose 17.78 per cent. Exports to the United Kingdom rose 6.64 per cent to $612.305 million.
What is GSP+?
GSP+ is the EU’s Generalised Scheme of Preferences Plus, which gives Pakistan preferential, mostly duty-free access to the EU market for many goods, including textiles, in return for meeting agreed international conventions.
