The latest move came Friday when Prime Minister Shehbaz Sharif discussed an early start to the Main Line-1 (ML-1) railway upgrade with Asian Development Bank (ADB) Vice President Yingming Yang in Islamabad.
ML-1, trade facilitation, private-equity reforms and GSP+ market access target different constraints on export competitiveness
The Prime Minister’s Office said the meeting focused on modernising ML-1, which the prime minister described as essential for freight logistics, regional trade connectivity and major industrial initiatives. The two sides also reviewed priority interventions under the ADB Country Partnership Strategy 2026-30, including support for private-sector development and export competitiveness.
Prime Minister Muhammad Shehbaz Sharif hosted a breakfast meeting in honour of Asian Development Bank (ADB) Vice President for South, Central and West Asia, Mr. Yingming Yang.
— Government of Pakistan (@GovtofPakistan) September 4, 2026
The Prime Minister emphasized that Pakistan has successfully navigated a difficult economic turnaround… pic.twitter.com/cOKNb0R98g
The railway initiative follows the government’s approval this week of a Trade Facilitation Board, while a committee is working on a National Private Equity Policy Framework. At the same time, Pakistan is facing renewed attention over the future of its preferential access to European markets under the EU’s GSP+ arrangement.
The four measures address different parts of the export chain: transporting goods, reducing trade-related procedural obstacles, mobilising long-term investment and accessing international markets.
ML-1 and Pakistan’s freight system
The proposed ML-1 upgrade comes against a long-term decline in the role of rail freight in Pakistan. The World Bank has reported that roads carry more than 94 percent of Pakistan’s freight, while rail’s share fell from 73 percent in 1980 to less than 6 percent. Its assessment identifies infrastructure limitations, low competitiveness and weak institutional capacity among the problems affecting Pakistan Railways.
The ADB’s proposed Karachi-Rohri project covers approximately 480 kilometres of the country’s core passenger and freight corridor. Its design includes improvements to railway infrastructure and operations as well as institutional and capacity-building measures. ADB project documents describe the Karachi-Rohri section as a proposed project rather than an already approved financing operation.
The government has also set a broader objective. Planning Minister Ahsan Iqbal said Thursday that exports were the only sustainable route out of Pakistan’s economic difficulties and described export-driven growth as essential to the country’s economic transformation.
Yet the movement of exports depends on the wider logistics chain. World Bank analysis of Karachi’s ports found constraints in rail access, freight capacity, train scheduling and facilities for transferring cargo between ships and trains. The assessment points to port-rail integration as an important factor in shifting more cargo from road to rail.
Pakistan’s transport data also show the current scale of rail freight. The Pakistan Economic Survey 2025-26 reports Pakistan Railways’ freight traffic in million tonne-kilometres for July-March FY2026, providing a baseline against which changes in rail’s freight role can be measured.
Trade facilitation targets another bottleneck
The Trade Facilitation Board approved on Thursday is intended to address non-tariff issues and improve the wider trade supply chain.
The government says the board, to be chaired by the prime minister, will prepare a roadmap for trade promotion and work on the Trade Facilitation Index. Authorities have also been directed to work on an emergency basis to enhance port capacity.
For exporters, the effects of such reforms would be reflected in measures such as clearance times, documentation requirements, port delays and other transaction costs. The broader export challenge, however, extends beyond border procedures.
The Pakistan Research and Development Centre (PRAC) says Pakistan’s pursuit of export-led growth continues to face structural constraints including macroeconomic instability, low productivity, insufficient investment and limited diversification across products and markets. It says export growth under the Strategic Trade Policy Framework 2020-25 remained modest and insufficient for structural transformation.
PRAC’s analysis also shows the concentration of Pakistan’s export base, with a relatively small number of products and destinations accounting for a large share of exports.
Long-term capital and productive investment
The National Private Equity Policy Framework addresses another part of the export equation: access to capital. Finance Minister Muhammad Aurangzeb chaired the committee’s second meeting, where officials reviewed regulatory, taxation, institutional-investment and legal workstreams.
The government says the framework is intended to mobilise domestic and international long-term capital for productive investment and create a stronger private-equity ecosystem. The committee is considering issues including institutional participation, investment, repatriation and exit, taxation, valuation and safeguards against misuse.
The government’s stated objective is to create an environment in which long-term capital can be channelled into productive economic activity.
PRAC’s research identifies insufficient investment and low productivity among the structural constraints on export-led growth. Its analysis also links Pakistan’s limited export diversification with weaknesses in productive capacity and competitiveness.
GSP+ and the market-access side
Even a more efficient logistics system and better-financed businesses still need access to international markets. Pakistan’s exports to the European Union benefit significantly from GSP+, a preferential arrangement linked to commitments covering human rights, labour rights, environmental protection and good governance.
Dutch Ambassador Robert-Jan Siegert said continuation of GSP+ should not be regarded as guaranteed and stressed the importance of concrete progress on human rights. He made the remarks at an economic roundtable hosted by the Netherlands’ embassy in Islamabad recently.
IPRI’s March 2026 analysis of Pakistan’s trade relationship with the EU says the country’s exports remain heavily concentrated in textiles and that future competitiveness will increasingly involve labour and environmental compliance, supply-chain traceability and other requirements affecting access to international markets.
The market-access question therefore extends beyond the tariff preference itself. It also concerns the ability of Pakistani producers to meet the standards and supply-chain requirements of major buyers.
Regional connectivity adds another dimension
Pakistan’s efforts to expand regional connectivity introduce additional opportunities as well as operational considerations.
The Centre for Research and Security Studies (CRSS) has reported that Pakistan is expanding connectivity with Central Asia and Iran while reducing reliance on Afghan transit routes. It cited the arrival of a Kyrgyz shipment in Karachi through China and the Khunjerab route as an example of a developing overland connection between Central Asia and Pakistan’s southern ports.
CRSS has also highlighted the effect of border disruptions and unpredictable trade arrangements on businesses and supply chains, with participants in its trade discussions calling for greater predictability and improved coordination.
Tabadlab’s Centre for Regional and Global Connectivity examines connectivity through the interaction of economic, political, security, financial and other factors, while PIIA research distinguishes between physical infrastructure and the institutional arrangements that allow trade corridors to function.
The research from these institutions treats physical infrastructure alongside regulatory, political, security and operational conditions in assessing the effectiveness of trade corridors.
The export record
Pakistan’s export performance provides the baseline against which the latest measures can be assessed. World Bank analysis shows that Pakistan’s exports have declined as a share of GDP over the long term, falling from about 16 percent in the 1990s to around 10 percent in 2024. The bank has linked the country’s relatively low export orientation with protectionist trade policies, costly inputs, regulatory constraints, logistics weaknesses and broader competitiveness problems.
PRAC’s export-led-growth analysis puts Pakistan’s exports at about $32 billion in 2024-25 against the government’s Uraan Pakistan target of $60 billion by 2029. Its comparison of productivity also shows Pakistan lagging several regional economies in the growth of output per worker.
The current policy measures consequently create several indicators that can be followed.
For ML-1, freight volumes, reliability, transit times and the integration of rail with ports and other modes will show how the railway’s role in goods movement changes.
For trade facilitation, clearance procedures, documentation requirements, port capacity and transaction times provide measurable indicators.
For private equity, the relevant evidence will include whether the new framework mobilises long-term capital into productive businesses and expands the pool of investable enterprises.
For GSP+, export diversification, compliance with international commitments and continued access to European markets will remain important indicators.
Pakistan’s export push is now being pursued simultaneously through infrastructure, trade procedures, capital formation and market access. Export volumes and diversification, productivity and investment, freight movement and access to major markets will show how those efforts translate into economic performance.
