Italian Review

Pakistan and Italy to enhance bilateral trade to US $ 1.5 billion
by Prof. Dr. Noor Ahmed Memon,

Italy has always followed with keen interest the Pakistani market and in the past decades has gradually increased its’ positioning, becoming one of the top ten global trading partners of Pakistan and the third amongst the EU member States with a growing trade exchange amounting in US$ 1.05 billion in 2015-16. Hence, over the years, Italian companies have been looking more and more at Pakistan for trade and investments. Energy remains today the most important sector, while alternative energies, including solar, wind and bio-gas, are acquiring a growing importance in commercial relations. The Pharmaceutical sector maintains a relevant position in bilateral trade relations with some of the Italian main companies, operating on the Pakistani market since the 1980s. Also the automotive sector plays a leading role, as well as textile; most spinning mills successfully of Pakistan employ Italian machinery.

The global integration of economies has forced the developing countries to adopt liberalized policies for attraction of foreign direct Investment (FDI). Around the world countries have adopted proactive and liberal policies to attract FDI. Special Economic Zones (SEZs) have gained momentum in attracting FDI. To meet global competitiveness effectively and efficiently, creation of SEZs in the country had become an acute necessity. The law to establish SEZs has been promulgated which necessitate reviewing the existing Investment Policy backed by FDI Strategy for 5-year to implement the policy through strategic interventions.

There is significant contribution in development sector, enhancing bilateral trade and investment between Pakistan and Italy is of significant importance to both countries. Exports have increased in Italy due to Pakistan under its Generalized System of Preferences-Plus scheme. However, over the past years trade between Pakistan and Italy has increased but the rise in exports has been greater than the imports. However, balance of trade in favour Pakistan decreased from US$ 386 million in 2014-15, to US$ 233 in 2015-16.

Stefano Pontecorvo, Italian Ambassador to Pakistan.

Cotton fabrics and yarn, readymade garments, towels, hosiery, beddings, carpet and rugs, cotton, leather, sports goods and surgical instruments are the major items exported from Pakistan to Italy. Export of textile and other items from Pakistan to Italy are given in Table 1.

Table 2: Export of Textile and other Itmes to Italy
                                                               (Value: US $ 000)


2013-2014 2014-2015 2015-2016

 Cotton fabrics

180,860 157,170 152,209


73,204 81,026 87,504

 Readymade garments

75,890 80,684 82,610


46,965 59,733 57,587

 Cotton yarn

23,886 15,071 16,372


27,552 31,239 30,853

 Textile made-ups

12,717 12,274 12,338

 Tents and canvas goods

39 132 66

 Art silk & synthetic textiles

11,099 9,406 8,204


71,553 63,316 56,357

 Carpets and rugs

4,867 3,908 3,582

 Surgical goods

7,723 6,954 6,973


19,937 19,647 18,420

 Leather gloves

6,276 7,279 6,519


109,923 185,741 102,758


671,842 733,580 642,352

 Source: Trade Development Authority of Pakistan

Textile machinery, general industrial machinery, power generating machinery, petroleum products, transport vehicles, iron and steel, pharmaceuticals, acrylic fibre, chemicals and paper and paperboard are the main items imported from Italy. Textile machinery market is closely influenced by the textile industry; regulations affecting this market have a direct bearing on the textile machinery market. Italian textile machinery exports in Pakistan increased from 37 million Euros in 2012 to 80 million Euros in 2016, thus showing an average increase of 23% per annum.

Pakistan and Italy have excellent relations and cooperation in the fields of both development and non-development sectors and the same are growing day by day. The financial contribution of Italian government in development sector is over Euro 1 billion in sectors including Health and Sanitation; Agriculture, Rural development and natural resources management; cultural heritage and education. The projects supported by the Italian government are focused on livelihood, improving living standards, and gender diversification. Programs supported by the Italian government spread all across the country with projects in Balochistan, Khyber Pakhtunkhwa, Punjab and FATA.


1.            Report on Pakistan - Italy Trade Relations & Business/Investment Opportunities, 2014 - by Khalid Majid Rehman, Chartered Accountants.

2.            Association of Italian Textile Machinery Manufacturers (ACIMIT)

3.            State Bank of Pakistan-Annual  Report 2015-16.

4.            Trade Development Authority of Pakistan.

5.            Pakistan Bureau of Statistics.


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