Korea-Pakistan Relations and Economic Ties

Beginning of Diplomatic Relations:

The Islamic Republic of Pakistan and The Republic of Korea (South Korea) have enjoyed more than four decades of diplomatic and economic relations. Although, both countries formally established diplomatic relations on 7 November 1983, Pakistan had supported Korea after the Korean war in 1950, by providing financial and humanitarian assistance with the contribution of US$378,000, tons of wheat, medicines and essential supplies. This early support contributed to the goodwill and historical connection between two countries. In 1968 Korea established its consulate General in the capital city (Islamabad) of Pakistan. Whereas Pakistan established its consulate general in Seoul in 1980.  

Over time, these relations gradually expanded into economic, education, trade, development, culture and tourism. South Korea was an export-oriented country, while Pakistan offered a developing and growing market. This combination created economic opportunities for both countries. Both parties followed the bilateral trade framework in which Pakistan exported products such as seafood, rice, textiles, petroleum products, leather and sports goods to Korea. While South Korea mainly exported automobiles, electrical machinery, motor vehicles, automotive parts, plastic, iron and steel to Pakistan.

Exports: Year - 2022

Total Bilateral Trade: $1.69 billion

Korea → Pakistan exports: $1.20 billion

Pakistan → Korea exports: $0.49 billion

Pakistan’s Trade Deficit: $0.71 billion (In favour of Korea)

 Korea-Pakistan Economic Cooperation:

In the 1950s, South Korea itself was a developing country. After its rapid economic development achievements, the country shared its development experience with other developing countries through its development cooperation agency channel KOICA – Korea International Cooperation Agency. Pakistan had also been a part of 27 core partner countries of KOICA. In Pakistan, KOICA supported projects like Water, Healthcare, Energy and Human Resource development. According to the official review of KOICA 2025, approximately US$87 million grant assistance was provided in 15 years after the establishment of Pakistan’s Office in 2010 and almost 1,841 Pakistani trainees have participated in the training programs in Korea.

South Korea has made major investment in Pakistan’s various industrial sector over the years. Further investment agreements between these countries have been made in 2019 and 2025. South Korea has invested in various major sectors such as local companies, joint ventures, manufacturing plants in Pakistan.

Major Sectors Korea Investment and Cooperation in Pakistan

Automotive: Hyundai and Kia have made investment arrangements in local vehicle assembly/manufacturing. The automotive development policy of Pakistan has specifically facilitated greenfield investment and foreign principal joint ventures.

Chemicals/Petrochemicals: Lotte Chemical Pakistan operated PTA (Purified terephthalic acid) manufacturing plant in Karachi. A clear example of direct industrial investment.

Electronics/Consumer Goods and Energy: Korean companies established electronics and consumer products business operations in Pakistan. It further explored projects and investment opportunities in the energy sector of Pakistan. In 2024, the government of Pakistan specifically invited Korean investors for investment in renewable energy, solar, wind and hydropower.

Industrial/Engineering: Korean firms have been involved in industrial equipment, engineering and infrastructure related business in Pakistan. In 2024, both governments specifically discussed on automobile investment and industrial parks and Korean Ambassador showed interest in exploring new investment opportunities in Pakistan.

Korea-Pakistan Trade Challenges:

But there are major trade challenges between Pakistan and South Korea. Noticeably, slow trade negotiations, barriers affecting trade & investment and a deep bilateral trade deficit. Productivity and competitiveness are major constraints in overall exports of Pakistan. The trade cost of Pakistan is affected by tariffs, trade logistics and connectivity. Though both countries have been working toward a Comprehensive Economic Partnership Agreement, the CEPA has not been concluded and implemented yet. As a result, Pakistani exports do not get benefit from preferential tariffs access in Korean markets. Over the years, Pakistan has been modifying and enhancing its policies to increase exports and decrease imports. Though there's still a trade imbalance between two countries, trade has increased between both countries in recent years. In 2026, Pakistan and Korea have agreed to engage on CEPA negotiations and expand trade and investment cooperation.

South Korea-Pakistan Potential Trade Opportunities:

South Korea and Pakistan have many potential opportunities to strengthen their economic cooperation in near future. Both countries are working to advance CEPA negotiations and expand bilateral trade. This can lead to market access and trade diversification in future. Alongside trade enhancement, both countries can do further cooperation in investment, technology and skills development. Pakistan already has agreed to provide investment opportunities to Korean companies, especially in the field of manufacturing and infrastructure. Pakistan can benefit from advanced technology, innovation and experience of Korean companies whereas, Korean businesses can benefit from Pakistan’s growing market and skilled workforce. New opportunities for cooperation can be explored specifically in the sectors of technology, automobiles, energy, manufacturing and IT. Moreover, solar, wind and hydropower have more potential cooperation. The relationship between South Korea and Pakistan can move toward investment, technology and long-term business cooperation rather than remaining limited to traditional trade.