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TEXT: The bilateral trade relationship between Italy and Pakistan has achieved a significant milestone in the second quarter of FY23, as Italy has emerged as a billion-dollar market for Pakistani exports. This establishes Italy as the second-largest European destination for Pakistani goods, despite the challenging market conditions resulting from the health emergency.
Italy has displayed active investment in Pakistan and has extended support through various initiatives. Under the Pakistan Italian Debt for Development Swap Agreement, Italy provided a substantial funding of US$100 million for social development projects in health, education, and sanitation. Furthermore, the Italian government has committed to offering a credit line of $10 billion for Italian investors seeking to venture into Pakistan. Italy has also backed Pakistan’s endeavours to secure a free trade agreement with the European Union.
Italy has consistently demonstrated a keen interest in the Pakistani market and has gradually strengthened its position over the past few decades. It has become one of Pakistan’s top ten global trading partners and the second-largest among EU member states. Although trade between Italy and Pakistan has grown steadily, the trade balance remains in favour of Italy. Pakistani exports to Italy have also witnessed an upswing under the Generalized System of Preferences-Plus Scheme.
Pakistan, a country with a promising future, is considered a pivotal player in Asia, with the potential to achieve remarkable economic feats. There exists robust cooperation between Pakistan and its Italian counterparts, aimed at leveraging Italian technologies and expertise for maximum benefit.
ITALY’S Top Exports to Pakistan
In FY22, Italy’s exports to Pakistan amounted to 519.39 million euros with growth of 24.2% compared to FY21; which is 0.73% of the total export made to Pakistan from the world. This substantial increase demonstrates a robust trade relationship and suggests a rising demand for Italian goods in the Pakistani market.
The top export to Pakistan were boilers and machineries (€231.53m), pharmaceutical products (€43.04m), iron and steel (€36.05m), electrical machinery and equipment (€20.42m) and organic chemicals (€19.54m).
Italy’s top export to Pakistan also includes products like heavy machinery such as power generating machinery, precision apparatus, metalworking machinery, transport equipment’s and electrical machinery.
Further, it imports iron and steel, telecommunication equipment’s, waste and scrap of copper and aluminium, surgical instrument, defence equipment, mineral fuels and dyes for tanning paints. Moreover, a considerable amount of arms is being exported to Pakistan by Italy.
The data for FY21 reveals that Italy’s exports to Pakistan were 418.58 million Euros, indicating a decline of 5.4% compared to FY20. While there was a slight reduction in exports, the trade relationship remained significant, emphasizing the ongoing trade flow between the two countries.
ITALY’S Top Import from Pakistan
In FY22, Italy’s imports from Pakistan amounted to 1,021.88 million euro’s, indicating a significant increase of 54.2% compared to the previous fiscal year which was 662.55 million euro’s. The Import from Pakistan to Italy in FY22 covers 3.60% of the Pakistan’s total export as compare to FY21 which was 3.08% of the total export of Pakistan. This demonstrates a substantial growth in imports from Pakistan to Italy, highlighting an expanding trade relationship between the two countries.
The top imports from Pakistan were textiles (over all €1.67 billion), cereals (€78.12m), beverages (€54.19m), plastic and articles (€41.64m) and raw hides and skins (€38.84m).
For FY21, Italy’s imports from Pakistan totalled 662.55 million euros. When compared to FY20, this represents a slight increase of 0.5%. Despite the challenges posed by the global market conditions during this period, the import level from Pakistan to Italy remained relatively stable.
Copyright Business Recorder, 2023
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