he humanity heaved a collective sigh of relief on May 10, following a ceasefire between the two nuclear-armed neighbours in South Asia, India and Pakistan, brokered by the United States. As highlighted by President Donald J Trump, the breakthrough was the result of intense diplomatic efforts initiated after his team purportedly received alarming intelligence.

According to CNN, a core group of top US officials, including Vice President JD Vance, Secretary of State Marco Rubio and White House Chief of Staff Susie Wiles, “while they declined to describe the nature of the information, citing its sensitivity,” said it was critical in persuading the three officials that the US should “increase its involvement.”

According to The Washington Post, “for four nerve-racking nights, missiles and drones streaked across the skies of major cities in India and Pakistan, as the nuclear-armed neighbours appeared to be sliding toward all-out war.” The most recent escalation, rooted in a long history of unresolved disputes and military posturing, intensified when India launched BrahMos missiles across Pakistan’s sovereign airspace, a move that received immediate and proportional response.

Pakistan’s retaliation, grounded firmly in Article 51 of the UN Charter, highlighted its adherence to international law and its capability to respond with strategic discipline. The conflict erupted after unprovoked and unjustified Indian airstrikes from May 7 to May 10, following a terrorist incident in Pahalgam on May 2 for which it blamed Pakistan. Pakistan has categorically denied being involved.

The strikes led to tragic civilian casualties, including women, children and the elderly, as well as damage to religious landmarks. Pakistan demanded an impartial international inquiry into the Pahalgam attack, an offer India refused, further exposing the diplomatic chasm between the two countries. President Trump’s intervention was instrumental not only in de-escalating the immediate conflict but also in steering the dialogue toward peace and trade.

President Trump’s offer for more trade, positioned as a historic economic opening, included a commitment to increase market access for Pakistani goods, eliminate certain tariff barriers and initiate investment programmes in high-tech sectors, agriculture and textiles.

The opportunity arrived at a critical juncture for Pakistan, especially considering the comparative data reflecting the current trade dynamics between the United States and South Asia. The US exports to Pakistan in 2024 amounted to $2,135 million and imports from Pakistan $5,124 million, resulting in a trade balance of $2,989 million in favour of Pakistan. Pakistan’s ranking in USA exports stood at 65, representing a 0.1 percent share. Its ranking in imports was 57, accounting for 0.2 percent of US imports.

The combined two-way trade ranked Pakistan at number 60. USA exports to Pakistan supported around 12,000 jobs in 2022, indicating that trade ties, although modest, already contributed meaningfully to both economies.

The trade structure between the two countries highlights that USA imports from Pakistan were led by apparel ($1,888 million), textile furnishings ($1,374 million), miscellaneous manufactured commodities ($251 million), knit apparel ($249 million) and fabrics ($189 million).

The US provided Pakistan with agricultural products worth $774 million; waste and scrap valued at $454 million; aerospace products and parts totaling $99 million; basic chemicals amounting to $63 million; and coal and petroleum gases worth $56 million. The trade pattern reveals that Pakistan continues to be a vibrant supplier of labour-intensive manufactured goods, while the US remains a source of high-tech, industrial and agricultural materials.

A comparison with India, however, paints a revealing picture. The US exports to India in 2024 stood at $41,753 million as imports surged to $87,416 million, producing a massive trade deficit of $45,664 million. India ranked 13th in US exports and 10th in its imports, with its share of exports at 2.0 percent and imports at 2.7 percent.

The bilateral trade relationship ranked India 10th overall in two-way US trade. The US exports to India supported 114,000 American jobs in 2022. This disparity reflects not only India’s larger market size but also a sustained favourable policy framework that has consistently benefited from US engagement.

The economic diversification must include bilateral and multilateral trade pacts that expand market access. China must be engaged not only as an economic collaborator but also as a defence partner, reinforcing regional security and economic integration.

The top Indian export items to the US included pharmaceuticals and medicines ($13,071 million), miscellaneous manufactured commodities ($12,292 million), communications equipment ($8,895 million), apparel ($4,722 million) and textile furnishings ($3,992 million).

The leading US exports to India were oil and gas ($7,884 million); miscellaneous manufactured commodities ($3,355 million); coal and petroleum gases ($3,160 million); aerospace products and parts ($3,010 million); and basic chemicals (US$2,336 million). The scale of trade highlights a deeply entrenched economic partnership that Pakistan now seeks to mirror through strategic re-engagement and policy reform.

The product-wise data for 2023 and 2024 reveals that Pakistan’s exports to the USA in key sectors remain significantly lower than India’s. In medical equipment and supplies, Pakistan’s exports increased from $129.0 million to $133.9 million, compared to India’s rise from $195.8 million to $211.0 million.

Rubber product exports from Pakistan to USA rose to $36.0 million, dwarfed by India’s $965.1 million. In the cutlery and hand tools category, Pakistan recorded $33.4 million compared to India’s $391.3 million.

Pakistan’s plastic products exports amounted to $24.1 million against India’s $876.6 million. Similar disparities were seen in footwear ($15.5 million versus$435.0 million); leather products ($23.5 million versus $495.4 million); fruits and tree nuts ($1.8 million versus $57.0 million); and dairy products ($1.6 million vs $43.9 million).

The agricultural sector has particularly suffered due to inconsistent trade access and non-tariff barriers imposed by US authorities. Pakistani flour, rice and fresh produce such as mangoes often face stricter phytosanitary and certification standards compared to those from other countries. These barriers have constrained the growth of Pakistan’s agro-exports, despite the country producing world-class varieties that can compete on both quality and pricing. The government of Pakistan must negotiate equal treatment and establish conformity protocols that are aligned with global best practices.

The workforce potential of Pakistan has also long been under-utilised in USA labour and talent acquisition programmes. While India has benefited from large-scale visa facilitation, corporate hiring and academic exchange partnerships, Pakistan’s skilled professionals have faced systemic neglect.

The tech and engineering graduates from Pakistan have repeatedly demonstrated superior performance in global competitions, research contributions and start-up ventures. The USA should re-frame its human capital policy to include Pakistan as a priority nation for skilled immigration, tech partnership and research collaboration.

The broader engagement strategy for Pakistan must now include proactive trade diplomacy. The leadership in Islamabad must leverage its geopolitical positioning and economic potential by fostering ties with the European Union, Gulf nations, China and Russia.

The economic diversification must include bilateral and multilateral trade pacts that expand market access. China must be engaged not only as an economic collaborator but also as a defence partner, reinforcing regional security and economic integration.

The proposed US-Pakistan trade deal must be designed to include preferential access to American markets; technical assistance in quality and standards compliance; and direct investment in Pakistan’s logistics, IT parks and industrial zones. The US tech giants and top universities should be incentivised to set up campuses, innovation hubs and R&D centres in Karachi, Lahore and Islamabad. Such measures can strengthen educational infrastructure, spur entrepreneurship and cultivate a knowledge-based economy.

The way forward for Pakistan’s economic resilience lies in its ability to combine IMF-prescribed reforms with homegrown innovation and diplomatic outreach. The recent approval of the extended fund facility and the resilience and sustainability facility by the IMF confirms global financial endorsement. The structural benchmarks on monetary policy, fiscal consolidation and energy sector reforms are essential for long-term stability. The success of these programmes requires continuity, transparency and political consensus.

The vision for a prosperous Pakistan must rest on inclusive growth, regional integration and human development. The path to becoming a regional economic hub demands focused investments in infrastructure, trade facilitation and digital transformation. The US-Pakistan trade partnership offers a renewed opportunity to reverse historical neglect, unlock potential and deliver tangible relief to the citizens of Pakistan. The government must act decisively to seize this moment and transform economic diplomacy into national prosperity.

Dr Ikram-ul Haq, writer and an advocate of the Supreme Court, is an adjunct teacher at Lahore University of Management Sciences.

Abdul Rauf Shakoori is a corporate lawyer based in the USA