Pakistan e-commerce giant says online sales surged through coronavirus lockdowns

In this photo, a woman is seen shopping through a point of sale application. (Photo courtesy: Social media)
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Updated 06 July 2020
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Pakistan e-commerce giant says online sales surged through coronavirus lockdowns

  • Massive increase in online sales despite only 21 percent of Pakistani adults possessing transaction accounts
  • Commerce ministry says figures do not include cash-on-delivery transactions-- making up 60 percent of total value of e-commerce 

ISLAMABAD: Pakistan’s e-commerce and digital economy has registered a huge boost in sales during the coronavirus pandemic as shoppers’ physical mobility is limited, Pakistan’s largest online marketplace said on Sunday.

In recent years, the country has tried to expand the digitization of its economy through promoting online businesses in a bid to boost exports and create job opportunities for young people. 

But it is coronavirus-related containment measures that seem to be bringing in the digital upheaval Pakistan’s economy has long been aiming for.

“We have received an overwhelming response… our data shows that online orders have grown by nine times [since March],” Muhammad Ammar Hassan, chief marketing officer at Daraz.pk, told Arab News.

Daraz.pk, owned by international e-commerce giant Alibaba, is Pakistan’s largest online shopping store with over seven million products available to order online, more than 30,000 sellers and 500 different brands registered with the platform. Additionally, 300 Pakistani businesses are also registered to export different items to the international market.

“We are getting hundred percent year on year growth in each item … and this has even increased since March due to the coronavirus,” Hassan said.

However, he added a low number of bank transaction accounts were a major hurdle in digital marketing and online businesses in Pakistan.

The increase in online transactions comes despite only 21 percent of Pakistani adults possessing transaction accounts in a country dominated by a cash economy.

Of this number, a minuscule seven percent of account holders are women, according to central bank figures from November last year. 

Pakistan’s state bank claims that migration to electronic payments will stimulate consumption and trade, helping the country’s economy by as much as seven percent, creating four million jobs and boosting GDP by $36 billion by 2025.

Although the digital industry remains in its infancy stage in Pakistan, there has been a steady rise in e-commerce transactions and in the number of registered e-commerce merchants. Sales of local and international e-commerce merchants in Pakistan have increased to Rs40.1 billion in 2018 from Rs20.7 billion in 2017, according to the Ministry of Commerce.

“These figures do not include all the post-paid, cash-on-delivery transactions which account for 60 percent of the total value of e-commerce in Pakistan,” Aisha Humera Moriani, joint-secretary at the Ministry of Commerce, told Arab News.

The government is also developing an international payment gateway that will be integrated with other online payment companies, like PayPal, to facilitate incoming payments to boost exports and facilitate freelancers.

“COVID-19 has pushed back development of the payment gateway, but we will be trying to roll it out as soon as possible,” Shabahat Ali Shah, chief executive officer at the National Information Technology Board, told Arab News.

Businessmen said that the encouraging online sales figures would grow further if the government offered tax incentives and ensured regulation for Pakistan’s e-commerce platforms, as numbers of people visiting shopping malls and retail outlets trickles to a near-halt.

“The footfall on stores and shopping malls has declined up to 80 percent after the outbreak of the coronavirus while revenue of the retail business has been reduced to only 25 percent,” Rana Tariq Mehboob, chairman for Pakistan’s Chainstore Association which represents 200 of the country’s most prominent retailers, told Arab News. 

He said that an overall 60 percent decline in sales had been registered at brick and mortar stores since March, as most shoppers switched to buying online. 

“This [online shopping] has increased drastically,” he said. 

“The majority of our revenue is from online now. The online business has grown up to 50 percent... but businesses still aren’t sustainable.”

Mehboob said many brands in his association were mulling shutting down their brick and mortar establishments after August to cut down on expenses and to focus instead on boosting their businesses online.

But the scope of online businesses, he warned, would remain limited until the state took responsibility for e-commerce.


Pakistan calls on US, UK to urge India to come for dialogue at neutral location

Updated 10 June 2025
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Pakistan calls on US, UK to urge India to come for dialogue at neutral location

  • After brokering May 10 ceasefire, US had said Pakistan and India had agreed “to talks on a broad set of issues at a neutral site”
  • Weeks after worst military confrontation in decades, India and Pakistan have dispatched top lawmakers to press their cases in US, UK

ISLAMABAD: The head of an official delegation visiting London to present Islamabad’s position following a recent military standoff with New Delhi said on Tuesday the United States and the United Kingdom should encourage India to come for dialogue at a neutral location.

Weeks after their worst military confrontation in decades, India and Pakistan dispatched top lawmakers to press their cases in the United States, where President Donald Trump has shown eagerness for diplomacy between them. The Pakistan delegation is currently in London in the next stop of its mission and will go onwards to Brussels.

Gunmen on April 22 massacred 26 tourists on the Indian-administered part of Kashmir in the deadliest attack on civilians in decades in the scenic region that has seen a long-running insurgency and is disputed between India and Pakistan since 1947. India accused Pakistan of backing the assailants — which it denies — and launched strikes on Pakistani territory.

More than 70 people were killed in missile, drone and artillery fire on both sides for around four days before the US and other allies brokered a ceasefire on May 10. US secretary of state Marco Rubio also said at the time the two nations had agreed “to start talks on a broad set of issues at a neutral site.” He did not specify when the talks would take place or where.

“As part of our achieving this ceasefire, it was agreed at the time that going forward, we would have a dialogue at a neutral location, covering all friction points,” said Bilawal Bhutto Zardari, the head of the Pakistani delegation and the scion of the political Bhutto dynasty.

Bhutto Zardari, who was speaking to BBC Radio, said it seemed from recent statements by Indian leaders and actions of the government in New Delhi that they were not in favor of pursuing talks.

“We still believe that the United States and other allies can engage with India as a friend and explain to them that these decisions are not in their interest,” he said. “Similarly, here in the United Kingdom, you have a long history with India and Pakistan. [Disputed] Kashmir is the unfinished agenda of the partition [of India and creation of Pakistan in 1947] and forms the root cause of our conflict.

“Your [UK] government too is well-placed to speak to the Indian government as a friend and explain to them that refusing to engage with their neighbor, for two nuclear-armed countries to have no dispute resolution mechanism, is not in anybody’s interest.”

Separately, Bhutto Zardari led Pakistan’s delegation in a discussion with the Financial Times Editorial Board in London.

“We reaffirmed Pakistan’s abiding commitment to peace, emphasizing that dialogue, not domination, remains the only sustainable path forward with India,” the leader wrote on X.

“Expressed grave concern over the erosion of strategic stability: India’s violations of the Indus Waters Treaty, the weaponization of water, and the dangerous descent toward conflict in a nuclearized region, a trajectory that threatens to condemn future generations to perpetual insecurity.”

 


Pakistan announces income tax relief for salaried class in FY2025-26 budget

Updated 10 June 2025
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Pakistan announces income tax relief for salaried class in FY2025-26 budget

  • Tax rate for those earning between $2,128–$4,255 annually to be cut from 5% to 2.5%
  • Pakistan’s tax-to-GDP ratio remains below 10%, among the lowest in the region

ISLAMABAD: Pakistan announced significant income tax relief for the salaried class on Tuesday as it announced its federal budget for the fiscal year 2025-26, aiming to ease the burden on working people amid high inflation and economic uncertainty.

Pakistan’s tax-to-GDP ratio remains below 10%, among the lowest in the region. The government has pledged to raise this ratio to 14% through tax reforms, digital enforcement, and expanding the tax base.

“First of all, we are providing relief where it is most needed, relief for the salaried class,” Finance Minister Muhammad Aurangzeb, presenting his first full-year budget in the National Assembly, said.

“In this regard, there is a proposition for a significant reduction in the income tax slabs for the working class.”

Aurangzeb said the income tax rate for individuals earning between Rs600,000 and Rs1.2 million ($2,128–$4,255) annually would be cut from 5% to 2.5%.

“For those earning up to Rs22,000,000 [$7,788], the tax rate has been proposed at 11% instead of 15%. Similarly, those who earn a higher salary, there is a proposition of tax reduction,” the finance minister said.

“For those who are earning between Rs22,000,000 [$7,788] up to Rs32,000,000 [$11,328], the tax rate has been proposed to be reduced from 25% to 23%.”

For high-income earners making over Rs10 million ($35,460) annually, a 1% reduction in the additional surcharge has been recommended to help curb the ongoing brain drain, the minister said.

Aurangzeb described the changes as part of broader efforts to simplify the tax structure and “strike a balance between inflationary pressures and take-home pay.”

The federal budget, with a total outlay of Rs17.57 trillion ($62 billion), comes as Pakistan seeks to stabilize its economy under a $7 billion International Monetary Fund (IMF) bailout program approved last year.

The budget also includes a 20% increase in defense spending, while total government expenditure is expected to be 7% lower year-on-year compared to the last fiscal, reflecting fiscal consolidation goals tied to IMF negotiations.

The proposed budget will be debated in parliament before final approval.


Pakistan to raise defense spending by 20% in FY26 amid tensions with India

Updated 10 June 2025
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Pakistan to raise defense spending by 20% in FY26 amid tensions with India

  • Pakistan unveils $62 billion budget, a 7% decrease in overall spending, debt servicing to consume half of total spending
  • Budget reflects attempt to balance security concerns with ongoing fiscal reform efforts under $7 billion IMF loan program

ISLAMABAD: Pakistan will increase defense spending by more than 20% in the 2025-26 fiscal year to Rs2.55 trillion ($9.04 billion) as it seeks to bolster military capabilities following the country’s worst confrontation with India in nearly three decades.

The move comes as the government unveiled a Rs17.57 trillion ($62 billion) federal budget on Tuesday, reflecting a 7% decrease in overall spending compared to the current fiscal year. The largest portion of the budget – Rs8.21 trillion ($29 billion), or nearly half of total expenditures – will go toward debt servicing, continuing to strain Pakistan’s fiscal space.

“National defense is the most important priority of the government,” Finance Minister Muhammad Aurangzeb said while presenting his first full-year budget in the National Assembly. “For this national duty, Rs2,550 billion [$9.04 billion] will be allocated.”

Pakistan’s defense budget for the outgoing fiscal year stood at Rs2.12 trillion ($7.44 billion). The increase comes weeks after a four-day military standoff with India in May, which erupted following an attack in Indian-administered Kashmir that left 26 Hindu pilgrims dead. New Delhi blamed Pakistan-backed militants, a charge Islamabad denied.

The two nuclear-armed neighbors exchanged missile, drone, artillery, and air strikes before agreeing to a ceasefire on May 10.

Aurangzeb said the budget was being presented “at a very important and historic moment when the nation in recent days showed extraordinary unity, determination and strength.”

“After the Pak-India war, India has threatened to block the flow of river water into Pakistan. India is trying to use water as a weapon. I want to make it clear that water guarantees Pakistan’s survival and no hindrance will be tolerated in this respect,” the finance minister added.

Fiscal consolidation under IMF watch

Pakistan remains under a $7 billion IMF loan program approved last year, and the budget reflects an attempt to balance security concerns with ongoing fiscal reform efforts.

The government has set a GDP growth target of 4.2% for the next fiscal year, while aiming to reduce the fiscal deficit to 3.9% of GDP. The economy grew just 2.6% in 2024/25, falling short of its 3.6% target due to weak agriculture and industrial output. Inflation is projected at 7.5%.

Security personnel shift boxes with copies of the 2025–26 fiscal budget outside the Parliament House in Islamabad, before the start of the budget session. (APP)

In a May 23 statement, the IMF said Pakistan had pledged to maintain fiscal consolidation while safeguarding “social and priority expenditures,” targeting a primary surplus of 1.6% of GDP in 2025/26.

Aurangzeb said the new budget aimed to “change the DNA of our economy” by boosting exports, building foreign exchange reserves, and promoting productivity to avoid recurring balance of payment crises.

Bridging the gap

The government expects total revenues of Rs11.1 trillion ($39 billion), leaving a Rs6.5 trillion ($23 billion) financing gap to be filled through domestic and external borrowing, as well as privatization proceeds. Privatization is expected to bring in Rs87 billion, while Rs106 billion ($376 million) is projected from foreign sources.

The Federal Board of Revenue (FBR) has been tasked with collecting Rs14.1 trillion of the projected Rs19.3 trillion in gross revenue, marking a 19% year-on-year increase.

Corporate employees watching television screens during presentation of Pakistan’s $62 billion federal budget for fiscal year 2025–26, in Islamabad. (APP)

Under the Public Sector Development Program (PSDP), Rs1 trillion ($3.5 billion) has been allocated, with Rs328 billion ($1.16 billion) earmarked for transport infrastructure projects. The government also set aside Rs113 billion ($399 million) for education and Rs32 billion ($113 million) for health care.

Aurangzeb also announced plans to grow IT exports to $25 billion over the next five years and forecast a rise in workers’ remittances to $38 billion by the end of the current fiscal year.

Mixed reaction from markets

The budget drew mixed reactions from analysts and market participants.

Muhammad Waqas Ghani, head of research at JS Global Capital Ltd., said the proposals prioritized “tax reduction, energy sector changes, and austerity” in line with the last two budgets.

He noted the construction sector was favored, while the auto industry was the most negatively affected.

“On equities, CGT (capital gains tax) remains at 15%, but income from loans will be taxed at 25% to encourage mutual funds to divert their funds toward the equity asset class,” Ghani said.

An elder man listening the 2025-26 federal budget speech live on his mobile phone at a roadside in Islamabad. (APP)

Amreen Soorani, head of research at Al Meezan Investment Management, said the budget proposals were largely in line with market expectations.

“While there are some discernible disparities in the taxation of various asset classes, the initial reaction from the listed equity market appears to be one of cautious optimism,” she told Arab News.

However, the Overseas Investors Chamber of Commerce and Industry (OICCI), which represents over 200 multinational companies in Pakistan, expressed disappointment, urging the government to overhaul tax structures to improve competitiveness and attract foreign investment.


Pakistan PM urges global powers to take ‘immediate action’ to end Israeli offensive in Gaza

Updated 10 June 2025
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Pakistan PM urges global powers to take ‘immediate action’ to end Israeli offensive in Gaza

  • Over 54,000 Palestinians have been killed since Israel launched its latest military offensive in Oct. 7, 2023
  • Pakistan has for decades called for establishment of independent Palestinian state based on pre-1967 borders

ISLAMABAD: Pakistan’s Prime Minister Shehbaz Sharif on Tuesday urged world powers to take immediate action to end Israel’s military offensive in Gaza, saying he hoped innocent Palestinians would achieve their dream of freedom soon.

Over 54,000 Palestinians have been killed and much of the coastal enclave of Gaza devastated since Israel’s latest air and ground offensive began in October 2023, health authorities in Gaza say. 

“The oppression, cruelty and barbarism taking place in Palestine and Kashmir — no matter how much we condemn it, it is not enough” Sharif said while addressing a federal cabinet meeting. 

“But I believe this is a very critical time for the global powers to effectively use their influence to ensure a ceasefire in Palestine, because what is happening there is the shedding of innocent Muslim blood — the blood of little girls, children and parents.”

The Pakistani PM added:

“I have strong hope in Allah Almighty, God willing, that the people of Palestine will gain freedom, the people of Kashmir will gain freedom. They have made tremendous sacrifices.”

Pakistan has been calling for a ceasefire and unimpeded humanitarian access to Gaza since the latest war broke out. 

Pakistan, which does not recognize Israel, has for decades called for the establishment of an independent Palestinian state based on pre-1967 borders, with Al-Quds Al-Sharif as its capital.

Although nearly 150 countries have recognized Palestine statehood, most major Western powers including the United States, Britain, France, Germany and Japan, have not. 

Muslim countries that do not recognize Israel include Pakistan, Saudi Arabia, Iran, Iraq, Syria and Yemen.
 


Pakistan shares range bound amid uncertainty over budget announcement

Updated 10 June 2025
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Pakistan shares range bound amid uncertainty over budget announcement

  • Index recorded intraday high of 970 points and low of 51 points, eventually closing at 122,024, gaining 383 points or 0.32 percent
  • Pakistan will unveil annual federal budget, seeking to kickstart growth while finding resources for hike in defense expenditure 

ISLAMABAD: The Pakistan Stock Market witnessed a range-bound session today, Tuesday, with the index fluctuating within a narrow band amid uncertainty surrounding the budget announcement. 

Pakistan will unveil its annual federal budget for the coming fiscal year on Tuesday evening, seeking to kickstart growth while finding resources for an expected hike in defense expenditure following a military conflict with India last month, the worst between the nuclear-armed neighbors in decades. 

Islamabad will also have to contend with remaining within the discipline of its International Monetary Fund program and the uncertainty from new trade tariffs being imposed by the United States, its biggest export market.

“The index recorded an intraday high of 970 points and a low of 51 points, eventually closing at 122,024 — gaining 383 points or 0.32 percent,” brokerage house Topline Securities said in its daily market review. 

“Market participation remained healthy, with total traded volume reaching 591 million shares and a traded value of PKR 21 billion.”

Media reports say the government is likely to present a 17.6 trillion rupee ($62.45 billion) budget for the fiscal year beginning July 1, down 6.7 percent from this fiscal year. It has projected a fiscal deficit of 4.8 percent of GDP, against a targeted 5.9 percent deficit in 2024-25, the reports say.

Analysts said they expect an increase of around 20 percent in the defense budget, likely offset by cuts in development spending.

Pakistan allocated 2.1 trillion Pakistani rupees($7.45 billion) for defense in the outgoing fiscal year, including $2 billion for equipment and other assets. An additional 563 billion rupees ($1.99 billion) was set aside for military pensions, which are not counted within the official defense budget.

The government of Pakistani Prime Minister Shehbaz Sharif has projected 4.2 percent economic growth in 2025-26, saying it has steadied the economy, which had looked at risk of defaulting on its debts as recently as 2023. Growth this fiscal year is likely to be 2.7 percent, against an initial target of 3.6 percent set in the budget last year.

Pakistan’s growth lags far behind the region. In 2024, South Asian countries grew by an average of 5.8 percent and 6.0 percent growth is expected in 2025, according to the Asian Development Bank.

With inputs from Reuters