Pakistan and Bangladesh Reopen Trade Ties After More Than 50 Years

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Key Takeaways

• On February 24, 2025, Pakistan exported 26,000 metric tons of rice to Bangladesh, marking the first large trade in 50 years.
• The rice export deal involves 50,000 metric tons, priced at $395 per ton, with the remainder shipping in March 2025.
• Direct shipping between Pakistan and Bangladesh replaces intermediary routes, improving trade efficiency and lowering costs for future exchanges.

Pakistan 🇵🇰 and Bangladesh 🇧🇩 have opened a fresh chapter in their relationship, restarting direct trade after more than 50 years. This development, announced in early 2025, underscores a shift in economic and diplomatic relations between the two South Asian neighbors. The decision to resume trade holds promise for both nations, whose shared history until 1971 has often shaped their interactions in the decades since. The move is significant not just for these two countries, but for the broader regional economy in South Asia.

First Large Trade Since Independence

Pakistan and Bangladesh Reopen Trade Ties After More Than 50 Years

The first step of this renewed trade partnership began on February 24, 2025, when Pakistan shipped 26,000 metric tons of rice to Bangladesh. This cargo, transported through Pakistan’s national shipping carrier, represents the first large-scale export of its kind between the two nations in nearly 20 years. The delivery is part of a larger deal to ship a total of 50,000 metric tons of rice, with the remaining 24,000 metric tons scheduled to leave Pakistan in March 2025. This deal, made between the Trading Corporation of Pakistan (TCP) and Bangladesh Trading Corporation (BTC), highlights the emphasis both countries are placing on fostering stronger economic ties.

The agreement followed a bidding process initiated in December 2024. Multiple offers for supplying rice were considered, with prices per metric ton ranging from $498.40 to $523.50. Ultimately, rice priced at $395 per metric ton was shipped, a rate higher than rice from alternative sources like Vietnam, but key for stabilizing Bangladesh’s rising rice prices. By splitting the shipments between Chattogram Port (60%) and Mongla Port (40%), routed from Pakistan’s Karachi Port, the deal also marks a significant step in logistical collaboration.

The Growth of Trade Volumes

Trade between Pakistan and Bangladesh has been growing steadily, crossing $1 billion as of 2023. Data reveals that in 2023 alone, Pakistan exported goods worth $690.47 million to Bangladesh. The bulk of these exports consisted of cotton ($484.64 million), salt and related products ($54.65 million), and oil seeds ($38.64 million). Additional products like inorganic chemicals and machinery made up smaller, but still notable, portions. On the other hand, Bangladesh exported significantly less to Pakistan in 2023, with exports reaching just $58.6 million. Major contributors to this figure were jute and other textile fibers ($40.1 million), raw tobacco ($3.65 million), and packaged medicines ($3.53 million).

Both nations are not just trading goods but are also engaging in talks about expanding the scope of their economic partnerships. Bangladesh has a strong demand for goods like sugar, apparel, mangoes, and, of course, rice that Pakistan is well-equipped to supply. Similarly, Bangladeshi products such as jute, pharmaceuticals, garments, and even pineapples are gaining market attention in Pakistan. These complementary trade interests have paved the way for a promising future.

Addressing Domestic Needs

This new trade agreement couldn’t come at a better time for Bangladesh, which has been grappling with increasing rice prices in recent months. Between the latter half of 2024 and early 2025, rice prices in Bangladesh surged by 15-20%, putting pressure on the interim government. Muhammad Yunus, who currently leads the government after Prime Minister Sheikh Hasina was ousted in a revolution in 2024, has been actively looking for solutions to stabilize the domestic rice market. The import of rice from Pakistan is seen as a strategic effort in this direction and marks a shift away from decades of limited economic exchanges between the two countries.

Though slightly more expensive than rice from traditional sources such as Vietnam ($375.63 per metric ton), the Pakistani shipment holds potential as part of a diversified supply chain aimed at securing stable prices in Bangladesh’s market.

A Diplomatic Thaw

The resumption of direct trade didn’t just happen in a vacuum; it reflects an easing of diplomatic strains that have persisted for over 50 years. The change started taking form as early as January 2025, when Bangladesh relaxed its visa policies for Pakistanis. Of particular note was the removal of an earlier requirement demanding clearance from Dhaka before granting visas to Pakistani heads of mission. This shift suggested a deliberate move toward addressing economic cooperation barriers and fostering new partnerships.

Meetings between leaders have also played an important role. Prime Minister Shehbaz Sharif of Pakistan and Bangladesh’s interim leader, Muhammad Yunus, met twice at international platforms in the past year. In both instances, trade was identified as a priority in their discussions, underscoring the political will on both sides to re-establish a cooperative relationship.

Logistics and Greater Trade Potential

A landmark development accompanying this resumption of trade involves maritime logistics. A Pakistan National Shipping Corporation vessel docked at a Bangladeshi port for the first time carrying trade cargo, highlighting a streamline in shipping routes. Previously, goods moving between Pakistan and Bangladesh needed to be offloaded at intermediary ports in Sri Lanka or Singapore before reaching their final destination. These extra steps added costs and delays to exports and imports, discouraging direct trade for decades. Now, direct shipping routes are expected to improve efficiency, leading to more seamless trade.

Both Pakistan and Bangladesh have shown significant gaps in their Economic Complexity Index (ECI) rankings, which may provide opportunities for diversification. Pakistan was ranked 89th in the ECI as of 2023, while Bangladesh ranked 113th. Their diverging strengths, such as Pakistan’s established manufacturing of textiles and food products and Bangladesh’s expertise in garments and pharmaceuticals, could pave the way for sector-to-sector collaboration. By building on these unique capacities, both nations could better integrate their economies.

Challenges to Overcome

While the progress in trade relations is commendable, challenges remain. Political disagreements and trust gaps rooted in their shared history cannot be ignored. Smooth collaboration will also require alignment of various trade regulations and policies to avoid unnecessary obstacles. Additionally, both Pakistan and Bangladesh are major textile producers, a shared market which may lead to competition in some areas.

Infrastructure development also needs to advance to support the anticipated increase in trade volumes. For instance, the growth of transport capabilities, such as rail and shipping lanes, will be critical if both countries aim to reduce delivery delays and enhance direct connectivity.

Why This Matters

The rekindling of direct trade ties between Pakistan and Bangladesh is not just about rice or textiles—it represents an effort to improve broader regional trade connections in South Asia. Years of limited trade have cost both economies. Now, with this new arrangement, there are opportunities to reduce reliance on other countries and focus on bilateral exchanges. This has the potential to benefit businesses, stabilize domestic markets affected by global price changes, and create better partnerships within the region.

Final Thoughts

The direct trade between Pakistan and Bangladesh is setting a precedent after over five decades of separation in economic transactions. With trade volumes already surpassing $1 billion and agreements such as the rice export deal set in motion, both nations have shown they understand how much is at stake. They are now poised to write a new chapter in their shared history.

For further details on global trade policies and procedures, refer to World Trade Organization (WTO), where official trade agreements and associated frameworks are regularly updated.

As reported by VisaVerge.com, this shift in economic collaboration could have ripple effects, inspiring other South Asian countries to explore direct trade possibilities, potentially reshaping the region’s economic landscape. While challenges remain, the resumption of trade between these two countries is a momentous step toward regional stability and economic opportunity.

Learn Today

Diplomatic Thaw → A significant improvement in relations between two nations after a period of strained or limited interaction.
Economic Complexity Index (ECI) → A measurement ranking countries based on the complexity and diversity of their economic and export products.
Interim Government → A temporary government established to manage state affairs until a permanent government is formed or elected.
Metric Ton → A unit of weight equal to 1,000 kilograms, commonly used in international trade and shipping.
Maritime Logistics → The planning and management of shipping and transportation of goods by sea, including port operations and routes.

This Article in a Nutshell

After 50 years, Pakistan and Bangladesh resume direct trade, a historic economic shift. February 2025 witnessed Pakistan exporting 26,000 metric tons of rice to Bangladesh, addressing rising food prices. This collaboration revives ties severed in 1971, fostering regional stability. Beyond rice, it signals potential for broader South Asian economic partnerships, overcoming decades-long barriers.
— By VisaVerge.com