As we celebrate Pakistan’s 75th anniversary, I share with pleasure that the cordial and cooperative relations between Pakistan and Italy are at a historic level.
Relations between Pakistan and Italy have fostered rapidly growing cooperation in various fields, including trade and investment. The 200,000 strong Pakistani diaspora in Italy is also an important manifestation of the everlasting bonds of friendship between the two countries.
In the just-concluded fiscal year 2021-2022, bilateral trade relations have taken many new steps.
Showing record growth, Pakistan’s revenue from Italy in exports and remittances exceeded $2 billion during the year. While a substantial growth in foreign direct investment (FDI) from Italy has also been observed. Italy has become a “billion dollar” export market for Pakistan for the first time ever, posting the highest growth. On the other side, Italy has become one of the major suppliers of textile and leather machinery in Pakistan.
Exports to Italy of $1.15 billion in fiscal year 2021-22 are 46% higher than the previous year, while remittances of $857 million are 41% higher. % to those of last year.
Pakistan recorded a record trade surplus of $573 million with Italy in the 2021-22 financial year, up 91% from the previous year.
Value-added sectors were the main drivers of this exceptional growth, with exports of plastic products increasing by 208%; sporting goods by 80%; leather 42%; home textiles 36 percent and clothing 35 percent.
As the pandemic hit the global footwear market, demand declined over the year, but Pakistan’s footwear exports to Italy increased by 19%, making Italy the third largest destination for Pakistani footwear exports. Italy is also the fifth largest destination for Pakistani home textiles and the sixth largest for garment exports. In the field of agricultural products, Pakistan is the largest exporter of rice to Italy, particularly in the Basmati sub-sector, where Pakistan now holds 82% of the Italian market.
During the last financial year, Pakistan received Italian investments in the agro-processing, chemical, construction, leather, footwear, energy equipment and IT sectors.
With the record increase in remittances over the past three years, Italy has become the largest contributor to this financial sector within the European Union. In 2021-2022, around 25% of total Pakistani workers’ remittances from the EU came from Italy alone.
In the wake of Brexit, Italy is home to the largest Pakistani diaspora in the European Union (EU).
Pakistan and Italy are also working on a labor agreement that will allow Pakistan to have full access to the Italian labor market. Pakistan has shared a draft agreement with the Italian authorities and formal negotiations are expected to start soon.
Pakistan has been reinstated in the Italian seasonal work visa since 2021. Italy is expected to allow 69,700 seasonal workers from certain countries in 2022 to come and work in Italy.
Pakistan and Italy support the trade liberalization agenda of the World Trade Organization and oppose unilateralism. Within the European Union, Italy has been a strong supporter of Pakistan’s candidacy and continued trade concessions under the GSP Plus scheme.
The Pakistani Embassy in Italy and the Italian Embassy in Islamabad have duly supported the dynamic initiatives of our entrepreneurs to deepen their engagement with Italian businesses. I hope this momentum will accelerate and translate into increased economic engagement in the years to come between two great friends.