Pakistan has been ranked 101 out of 158 countries in the 2025 Illicit Trade Index, raising serious concerns about its economic environment and ability to attract investment, according to a report by The News International.
The country’s struggle with illegal trade is resulting in an alarming annual revenue loss of Rs 751 billion, with the tobacco sector alone accounting for Rs 300 billion of this deficit.
These findings were presented in a new report titled “Pakistan’s Battle Against Illicit Trade: An Analysis of Challenges and Pathways to Resilience,” released jointly by the Policy Research Institute of Market Economy (PRIME) and the Transnational Alliance to Combat Illicit Trade (TRACIT) on Thursday.
The report highlights five key sectors driving these losses: Tobacco (Rs 300 billion), petroleum products like petrol and diesel (Rs 270 billion), tires and lubricants (Rs 106 billion), pharmaceuticals (Rs 60-65 billion), and tea (Rs 10 billion).
Pakistan scored 44.5 on the Illicit Trade Index, falling below the global average of 49.9.
Pakistan’s performance across six dimensions of the Index can be gauged by the highest score observed in Trade, Customs and Borders (75.4), indicating relatively strong border controls and customs management mechanisms. However, Supply Chain Intermediaries (25.9) and Sectoral Illicit Trade Indicators (29.3) score notably low, pointing to serious vulnerabilities in internal trade networks and sector-specific compliance. Moreover, moderate scores in Taxation and Economic Environment (47.3), Regulatory Framework and Enforcement (46.4) and Criminal Enablers of Illicit Trade (42.7) suggest systemic weaknesses in policy implementation and enforcement capacity, The News International reported.
Overall, the findings suggest that while Pakistan is making some progress at the borders, much deeper reforms are needed within the country’s internal trade, regulatory, and enforcement systems to curb illicit trade and support sustainable economic development.
