Italy becomes ‘billion dollar’ export market for Pakistan

ISLAMABAD: Pakistan’s exports to Italy have crossed $1002 million during first 11 months of current financial year with value added sectors becoming main driver for the export market that hit $1 billion for first time, a statement said on Tuesday.

In the period concerned, country's trade surplus with Italy has increased 84 percent to reach near $500 million. Three years ago, Pakistan had a trade deficit of $148million with Italy.

At a time when Pakistan's economy is struggling with ever widening trade deficit, some of its export markets are displaying exceptional growth. Italy is among countries where Pakistan’s exports have been rising phenomenally despite tough market conditions caused by the Covid-19 health emergency, the statement added.

Ambassador to Italy, Jauhar Saleem, has briefed media about embassy’s initiatives for trade, investment and remittances enhancement, including engagement with the host government, industry associations, business leaders, chambers of commerce and SMEs.

“Italy has become a billion dollar export market for Pakistan for the first time ever.”

In first 11 months of this financial year, exports to Italy increased 46 percent, which is highest growth rate among all of our export destinations in Europe.

In last three years, despite pandemic driven market disruptions, Pakistani trade with Italy not only recovered from the deficit, but has turned around to post a trade surplus of half a billion US dollar.

The achievement owes much to the resilience and dynamism of country’s entrepreneurs in the export sector, ably supported by Pakistan embassy in Italy, the statement said.

From an increasingly diversified export basket, home textiles, leather, rice, plastic products, surgical instruments, general fitness equipment and auto-parts have been the top performing product lines.

In the wake of the pandemic led health consciousness, Pakistan's exports of articles of general fitness have also increased by over 100 percent, while export of plastic products has increased 356 percent, making Italy Pakistan's 4th largest export destination for plastic products.

Pakistan also further improved its position as the market leader in rice sector with its exports increasing by another 31 percent.

The embassy has been specially engaging with sourcing firms and investors so as to leverage the pandemic hit conditions to Pakistan's advantage in terms of enhanced focus of Italian importers on Pakistan, which has helped promote greater business to business (B2B) interaction as well as exchange of delegations.

Recently, a 10- member buying mission from Italian leather sector visited Pakistan, and another delegation will be visiting TEXPO Pakistan in August 2022.

Similarly, 22-member delegation of Footwear Manufacturers Association (PFMA) is visiting Italy from 11-15 June 2022 and a 35 member delegation from leather sector will be visiting Italy in September 2022.

PFMA chairman, Zahid Hussain has, in a press statement, recognised support of Pakistan Embassy Rome for footwear exporters in recovering from challenging conditions and getting back on growth trajectory in the Italian market.

He appreciated role of the embassy in establishing Pak-Italy Footwear Technology Institute at Lahore that is playing a vital role in inducing competitiveness and modernisation of Pakistan's footwear sector.

There has also been an unprecedented inflow of workers’ remittances from Italy to Pakistan in the last couple of years. The overall growth in workers’ remittances from Italy has been almost 50 percent in first 10 months of this year, making Italy Pakistan's biggest source of remittances in the EU and the 7th largest in the world.

Workers’ remittances are expected to cross Rs850 million by the end of the current financial year. Both countries are also working on a labour agreement, which would open new opportunities for Pakistani skilled and semi-skilled workers in the Italian market.

Foreign direct investment (FDI) from Italy has also witnessed promising growth during the current year. As health concerns and travel restrictions relating to COVID abate, corporate travelling from Italian businesses to Pakistan is picking up fast.

Many Italian investors are currently negotiating and finalising investment deals; especially in the areas of food processing, construction, chemicals, energy, textile, leather, and IT.

Italy's largest player in the energy sector ENEL is also exploring Pakistani market for investment. The embassy is providing all required support to facilitate the growing investments, particularly in a JV mode so to promote the flow of technology and knowhow as well.

Overall Pakistan-Italy commercial cooperation in three main sectors of economic engagement is now worth $2.5 billion, which is the second highest in the European Union after Germany.