Import Export Business in Pakistan is gaining attention due to e-commerce. Trade of goods on an international level started centuries ago. It changed and grew from time to time. In 1924 the first passport was designed, and first-time international trading was only allowed to those businessmen with visa permission to enter any country.
It was challenging to find out the market gap or needs of the customers from other countries. The country’s government established its departments in other countries to facilitate their traders to point out the specific goods needed in the country.
Moreover, developed countries always took advantage and assisted their traders better than developing countries. But now the world has changed and become a global village after the invention of the internet. You can find out the products in demand in your country, or you can also find out the market for your product by using the internet
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Potential for exporters from outside Pakistan
Import always depends on the demand for the specific product in the local market. Currently, Pakistan has great potential for the following categories: electrical appliances, agro products including seeds, pesticides, herbicides, Seafood, forestry, and industrial equipment, including plants and machinery.
When we study the retail market, it is underdeveloped and has no idea about the target audience. Mainly retail market is filled with private ownership shops and controlling the demand.
In Pakistan, Many shops sell different goods, e.g., tires, garments, mechanical parts, and surgical items. Mostly they are near each other and have looked for the market in metropolitan cities.
Import options for foreigners
Business people from foreign countries who want to sell or promote their products in Pakistan choose one of the listed three options, local distributors, domestic agents, or make a distribution network with their resources.
Firstly, foreign industries sign contracts with local suppliers or distributors about the terms and conditions related to the supply of the products and the payments.
Most foreign enterprises take 50% advance payment to start production and 50% payment before the shipment. Moreover, We recommend that took advance payment before exporting products to Pakistani suppliers.
Agents or dealers work under two conditions; first, they will contract with the foreign organization on a fixed commission, which may vary from 10% to 20% depending on the commodity, as purchasing for a factory is about 10%, while on spare parts, 15 to 20%.
On the other hand, some dealers want to know the product’s total price, which they will pay to receive in their stores. After that, they will add their margin and sell the product in the local market.
Pakistan is a developing country with a high potential for foreign organizations to build their distribution network to enjoy healthy profit margins.
Additionally, they will have a chance to study the local market and launch products according to the local cultural norms, values, and tastes.
For international trade, you have to follow some international rules and regulations. For example, You have to be careful about the blocklist of the organization in different countries, or some countries do not allow hiring a third party from a specific country.
For example, Suppose you export some product from the US to Pakistan and hire cargo from an Iranian organization. In that case, the US government will hold your documents because the US has imposed sanctions on Iran. We are discussing Import Export Business.
Main import product in Pakistan
Importing a product in any country always depends on the demand for the product in that country. If you are interested in importing products in Pakistan, it depends on their order in the Pakistani market. China, Saudi Arabia, the United Arab Emirates, Japan, and Indonesia are the key sources for importing products to Pakistan.
Most significant imports from china to Pakistan
Here is the list of the products that are significantly importing Pakistani importers from china: Chemicals, dyes, plastic materials, cotton yarn, textile machinery, automobile tires, water minerals, alloy steel, synthetic fibers, pesticide products, flavoring agents, molds, tea, synthetic rubber, washing powder, animal fats, pharmaceuticals, dried vegetables, peanuts, petroleum products, Promotional items and cooperate gifts.
List of products that can not import to Pakistan
- Hazardous waste
- Goods that conflict with Islamic teachings
- Dyes that contain benzidine or producing from benzidine
- Alcoholic beverages or alcohol include waste or residues of the distillation process used for wine production.
- Used tires
- Retread tires
- Polythene or polypropylene scrap
- factory waste, Electronic waste, liquidation, and junk goods that do not qualify for the import policy
- Import from India is restricted in Pakistan and only permitted under the specific rules and procedures of importation.
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Products that are regulated for import in Pakistan
We can only import certain products if these products meet the specific conditions or criteria imposed on the products by the Government of Pakistan.
If you want to import these products, you have to take approval or take a certificate of import in advance from the regulatory body. The list of these products is shared below for your convenience:
- Radioactive materials and instruments
- Breed term
- Tobacco Products
- Explosive including calcium carbide
- Pesticides ( Pesticide products or raw materials that are used to manufacture the pesticide products can only import for industrial organizations)
- Food colors
- Public sector organizations can import wheat
- To start an import/export business in any country, you must be very careful about the correctness of procedures and documentation.
We are discussing Import Export Business in Pakistan in 2022.
Significant Pakistani products for export
First, we will discuss the viable products for export before knowing about Pakistan’s export procedure. We share a product list that can be exported from Pakistan with their statistics.
Product list 1
- Textile ( 61.26% of the total export of Pakistan worth 9999.77 million US dollars from July to Feb 2020 to 2022)
- Fruits ( Total export worth in fiscal year of July 2020 to Feb 2022 is 340 million US dollars)
- Rice ( Total export worth in fiscal year of July 2020 to Feb 2022 is 1337 million US dollars)
- Cement ( Total export worth in fiscal year of July 2020 to Feb 2022 is 183.2 million US dollars)
- Footwear ( Total export worth in fiscal year of July 2020 to Feb 2022 is 88 million US dollars)
- Sports goods (Football, gloves, and others. Total export worth in fiscal year of July 2020 to Feb 2022 is 168.59 million US dollars )
- Furniture ( Total export worth in fiscal year of July 2020 to Feb 2022 is 2.75 million US dollars)
- Guar and guar products ( Total export worth in fiscal year of July 2020 to Feb 2022 is 22.69 million US dollars)
- Cutlery ( Total export worth in fiscal year of July 2020 to Feb 2022 is 80.95 million US dollars)
- Livestock meet ( Total export worth in fiscal year of July 2020 to Feb 2022 is 216 million US dollars)
Product list 2
- Spices ( Total export worth in fiscal year of July 2020 to Feb 2022 is 61.5 million US dollars)
- Vegetables ( Total export worth in fiscal year of July 2020 to Feb 2022 is 199 million US dollars)
- Oilseeds, nuts, and kernels ( Total export worth in fiscal year of July 2020 to Feb 2022 is 60 million US dollars)
- Seafood ( Total export worth in fiscal year of July 2020 to Feb 2022 is 250.72 million US dollars)
- Electric fans and other electric machinery ( Total export worth in fiscal year of July 2020 to Feb 2022 is 45 million US dollars)
- Plastic materials ( Total export worth in fiscal year of July 2020 to Feb 2022 is 209.5 million US dollars)
- Carpet, rugs, and mats ( Total export worth in fiscal year of July 2020 to Feb 2022 is 47.55 million US dollars)
- Tobacco mats ( Total export worth in fiscal year of July 2020 to Feb 2022 is 22.27 million US dollars)
- Surgical instruments ( Total export worth in fiscal year of July 2020 to Feb 2022 is 265 million US dollars)
- Leather goods ( Total export worth in fiscal year of July 2020 to Feb 2022 is 382 million US dollars)
- Engineering equipment ( Total export worth in fiscal year of July 2020 to Feb 2022 is 94 million US dollars)
- Jewelry ( Total export worth in fiscal year of July 2020 to Feb 2022 is 6 million US dollars)
We will tell you about Pakistan’s Import-Export & Trading Business in 2022.
Top four export products
We will present the top five products that Pakistan exports to other countries.
- Fruits & vegetables
- Leather goods
According to the area used for sowing after cotton and wheat, rice is the third-largest crop produced in Pakistan. During the “Kharif,” or summer season, we use ten percent of Pakistan’s agricultural land to produce rice.
Pakistan is leading in IRRI and basmati rice production and is a leading exporter of these items. Govt is estimating that rice production will remain near 7.4 MMT in 2020/2022.
The export of rice from July 2020 to Feb 2022 remains at 1337.89 million US dollars, which shows a downward trend concerning the same period of the last fiscal year of July 2019 to Feb 2020.
In Asia, Pakistan ranked at 8th position for exporting textile products while it is the 4th biggest producer of cotton with 3rd position for consuming cotton. Moreover, 46 percent of the total manufacturing industry is based on textile products, utilizing 40 percent labor force of Pakistan.
The textile industry has significantly contributed to Pakistan’s export sector for the last two years. Almost 61 percent of Pakistan’s total export rely on different textile products like cotton yarn, knitwear, bedwear, readymade garments, and synthetic textile.
Fruits & vegetables
Pakistani vegetables and fruits are in demand worldwide. Pakistan exports vegetables and fruits to Europe, the USA, the Far East, Sri Lanka, the Middle East, and India.
The main vegetables and fruits exported from Pakistan are Mangoes, Oranges, Guava, dates, Kino, Pine nuts, apples, potatoes, chilly, garlic mushrooms, and onion. The data shows that Pakistan exports a product to a single market, like Pakistan exports mangoes to Dubai, Saudia Arabia, and England.
Moreover, fresh apples are only shipped to the Sri Lankan markets. In this condition, the customer deals with his terms and dictates you fulfill his terms. So, Pakistan needs to explore different markets for better profit and to enhance Pakistani vegetables and fruits.
Pakistan’s leather industry is mainly exporting its products. It is the 3rd highest exporting industry after textile and rice. It has total export for the fiscal year of July 2020 to Feb 2022 of 382 million US dollars as presented by the Ministry of Commerce, Government of Pakistan.
Presently, 2500 organizations are working in the leather industry (both unregistered and registered). At the same time, 800 tanneries listed produce finished leather to fulfill domestic needs and export purposes. These organizations work mainly in Pakistan’s following areas: Karachi, Multan, Sahiwal, Lahore, Kasur, Sialkot, Faisalabad, and Peshawar. 90% of the total leather goods are produced in Karachi and Sialkot only.
Additionally, experts divide the leather sector into subcategories depending on their product type: tanning, gloves, footwear, garments, and other products. The Ministry of industries regulates this industry, whereas different bodies representing this industry and acting as a connection between the industry and the government are named as follows.
“Pakistan tanners association (PTA), Pakistan leather garments manufacturers & export association (PLGMEA) and Pakistan footwear manufacturing association (PFMA).”
Pakistan needs research and development in leather production urgently because leather production is decreasing due to old methods used for leather production.
However, Pakistan has excess raw materials for leather production. Moreover, leather products are also a key component in the import export business in Pakistan.
Major export markets for Pakistani exporters
Currently, Pakistan is exporting products to the following countries.
- United States of America
- Saudi Arabia
- United Arab Emirates
- Sri Lanka
- United Kingdom
Here you can find data for Import Export Business in Pakistan in 2022.
How we can start an export business from Pakistan
A company’s success always lies in the planning phase, and creating an export business from any country requires more planning than any other business. Now we will discuss the steps to start an export business from Pakistan.
Establish an export organization
First, you must register an import/export organization with Pakistan’s securities and exchange commission (SECP). You can register your industry with three significant categories: sole proprietorship, limited public liability, or limited private liability. Moreover, it would be best to have the following registrations before starting an export business in Pakistan.
- National tax number (NTN)
- Membership from the chamber of commerce
- Sales tax registration (Not compulsory for exporters)
- Bank account in the name of your registered organization
Most foreign investors register their organization as a limited liability under Pakistan’s 1984 corporate law.
You can also export products using an organization’s franchise system or a joint venture with a company for export purposes.
List of Documents required for export
You need the following documents for exporting your product.
- E-form issued by a commercial bank having authorization
- Country origin certificate
- Commercial invoice
- Packing List
- Certificate of non-GMO required only for specific countries
- AWB or B/L
- Certificate or pre-shipment if required
In Pakistan, there is a rule that an exporter regularly imports or exports products from Pakistan. Pakistan recognizes them as a priority exporter. The government introduced this rule to promote export activities in Pakistan.
After registering the company and frequent business activities under the import/ export business, you can enjoy this facility. Pakistan customs department prepared an extensive plan for accessible goods clearance under the World custom’s guidance to assist the priority exporters.
The priority exporters receive this incentive and provide the following details to the customs department: Company profile, Foreign partner information if applicable, number of employees, and bank account.
Benefits of becoming a priority exporter
Priority exporters receive many benefits in clearing their goods from customs without inspection. They receive their goods from the port and reach their plants without lengthy procedures but fulfill the essential basic operations.
Custom departments give access cards at the entry point without bothering them to enter challenging customs, offshore terminals, railway stations, and dry port procedures. The case completion time reduces to 6 to 9 months, whereas the bank guarantee was also reduced to 50 percent.
As a priority exporter, You have the other advantage: a support point is available with designated officers who help you solve your business’s legitimate problem.
Communicate and Build Relationship
Export business always starts by identifying the target market and target audience. After that, you need to market your product which you will do by making relations or hiring 3rd party to market your product. Most important, For a better response from the international market for your product, you must focus on the quality management system and take an ISO-9001 certificate from a third party.
This certificate will help you communicate with your customer that you are giving a quality product to them. Both parties should remain careful on financial matters and investigate each other before making a deal. For this purpose, you can also hire a third party who will provide consultation on the following matters: accounting rules, Business laws, Legal document laws, and Export licenses.
Import Into Pakistan
If you plan to import any product from any country into Pakistan, you must follow customs clearance rules, procedures, and import/export documentation. It won’t be easy to understand the customs requirements to clear your goods if you are new.
For this reason, we recommend that you hire a professional agency to fill in all the required documents on your behalf to clear your goods. Whenever goods reach customs, they assign a general import manifest (IGM) to the consignment, which will support you in identifying your goods in the customs department.
We provide the list of these rules and procedures and discuss the required documentation for your convenience that you need to Import Export Business in Pakistan in 2022.
List of documents for import into Pakistan
It will help you to clear your products
B/L (Bill of landing)
Bill of landing comprises the following information
- An invoice signed by the shipment owner or manufacturer
- Consignee name
- Ship name used for the transportation of the goods
- Packaging number and description
- Serial number
- Product value for C&F prices
- Product Origin
A national tax number (NTN) copy is essential for the clearance of imported product
Sale Tax number
As an importer, you have to register for a certificate of sale tax number
Sale tax return
You also need to provide the recent sale tax return copy for clearance
Procedure for custom
This blog discussed the Import-Export & Trading Business in Pakistan in 2022.
Export needs to be increased in import export business in Pakistan.
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