Pakistan's Struggle with Illicit Trade: A $751 Billion Revenue Challenge

Pakistan ranks 101st among 158 nations in the 2025 Illicit Trade Index as illicit trade severely impacts its economy, particularly in the tobacco sector. A new report underscores weaknesses in internal trade and enforcement systems, despite robust border controls. Urgent reforms are needed for sustainable economic development.

Pakistan finds itself grappling with a severe economic challenge as it ranks 101st out of 158 countries in the 2025 Illicit Trade Index. According to The News International, this ranking highlights the country's struggle to combat illicit trade, which is costing it a staggering Rs 751 billion annually. Notably, the tobacco sector is a major contributor to this deficit, accounting for Rs 300 billion of the losses.

A recently published report, "Pakistan's Battle Against Illicit Trade: An Analysis of Challenges and Pathways to Resilience," jointly released by the Policy Research Institute of Market Economy (PRIME) and the Transnational Alliance to Combat Illicit Trade (TRACIT), sheds light on the sectors driving these losses. Tobacco, petroleum products, tires and lubricants, pharmaceuticals, and tea are identified as the top areas where illicit trade causes substantial economic damage.

Despite robust border controls reflected by a high score of 75.4 in Trade, Customs, and Borders, Pakistan's overall score of 44.5 on the Illicit Trade Index falls below the global average of 49.9. Low scores in Supply Chain Intermediaries and Sectoral Illicit Trade Indicators expose significant weaknesses, while moderate scores in taxation and regulatory frameworks suggest systemic policy enforcement challenges. The country's need for extensive internal reforms is evident as it strives for sustainable economic progress. (ANI)

(With inputs from agencies.)