Pakistan's export trap and revealed comparative advantage

Pakistan has mastered a narrow range of exports, exporting a mere USD 30.67 billion in 2025, which represents only 0.12 percent of global exports totaling USD 25.61 trillion. The country's primary exports are concentrated in textiles, agro-food, and a few other manufacturing products. In almost every case where Pakistan has a strong revealed comparative advantage (RCA), the global market for that product is either small or already crowded.

For instance, bed linen, which generated USD 23.6 billion in global exports, accounted for USD 4.42 billion of Pakistan's exports, yielding an RCA of 156. Men's wear, with a global market of USD 55 billion, saw Pakistan export USD 3.13 billion, giving it an RCA of 47. Rice, with global exports of USD 33 billion, contributed USD 2.42 billion from Pakistan, with an RCA of 60.

These three products alone account for nearly one-third of Pakistan's export earnings, exposing the economy to shocks in these sectors. Pakistan's specialization reaches deep into the textile and leather value chain, with products like jerseys, cardigans, t-shirts, woven cotton fabrics, women's suits, men's shirts, hosiery, cotton yarn, leather apparel, made-up textile articles, cotton fabrics, gloves, worn clothing, cotton fabrics mixed with man-made fibres, synthetic staple woven fabrics, terry towelling, cotton sewing thread, cotton seeds, and more showing remarkable RCA values.

However, Pakistan's expertise is limited to niche commodities, and it has not diversified into larger, higher-value, or more rapidly growing product categories.