Pakistani textile and rice exporters may face hardships due to developing situation in the Gulf region and blockage against Qatar. Pakistan’s major exports to Qatar include textiles and rice.
The trade volume between the two countries is not encouraging and is in favour of Qatar due to huge imports of liquefied natural gas (LNG) by Pakistan.
The total trade volume between Pakistan and Qatar is around $1 billion in 2017 after the implementation of LNG trade deal. The bilateral trade between the two countries was $300 million in 2015, in which Pakistan’s exports to Qatar was $124 million. At present, Pakistan imports about 600m cubic feet per day of LNG, most of it from Qatar. This accounts for almost one-fifth of Pakistan’s natural gas consumption that may increase going forward given Islamabad’s quest to ramp up LNG imports to 2,000MMCFD by 2022.
The population of Qatar is merely 2.2 million and most of the expatriates are engaged in construction and other activities. Pakistanis living in Qatar would face difficulties as they are being shifted to other countries. In such a situation, Pakistan would face shortage of remittance inflows. Ministry of Overseas Pakistanis and Human Resource said that about 115,000 Pakistanis were currently working in Doha sending home $17-18 million in remittances. They contributed a total of $342m in eleven months (July-May) of the current fiscal year, accounting for less than 2pc of the total $17.5 billion remittances from overseas Pakistanis. These dropped slightly from $345m of the same period last year in line with declining remittances from elsewhere.
The State of Qatar and the Islamic Republic of Pakistan have signed a number of commercial agreements, including one on the encouragement and protection of investments that was signed in April 6, 1999. There was also an agreement on economic cooperation signed back in April 16, 1984.
For fight this situation, Pakistan tilted towards Iran. On 21st June, Pakistani minister of commerce Khurram Dastgir Khan said that preparations for signing Free Trade Agreement (FTA) with Iran are underway. Iran and Pakistan had earlier agreed to increase their bilateral trade up to $5 billion during next five years.
India and Qatar
India is Qatar’s third largest buyer of natural gas after Japan and South Korea. Petronet LNG Ltd (PLL) has three contracts with Qatar’s RasGas and buys 8.5 million tonne of LNG. Additionally, it sources the fuel from the spot market.
However, trade between India and Qatar has been consistently falling since 2014-15, reaching $8.42 billion in 2016-17 from $15.65 billion in 2014-15, according to Commerce and Industry Ministry statistics.