Pakistan

Current status

Pakistan faces severe security deterioration with 500 events recorded over the past 30 days, including 339 critical and 160 high-severity incidents concentrated on May 17th. Military operations, chemical weapons deployment, and widespread violence across Balochistan, Punjab, Sindh, and the capital Islamabad indicate a dramatic escalation in internal conflict. The country's already poor governance indicators (stability at 12/100, corruption at 27/100) provide little buffer against this crisis.

Supply chain impact

• Textile and garment buyers face immediate production disruptions as violence spreads across Punjab and Sindh provinces, where most manufacturing capacity is concentrated, potentially affecting $15+ billion in annual textile exports to the EU and US.
• Rice export operations through Karachi port are at risk from security incidents in Sindh province, threatening food supply chains for Middle Eastern and African markets that depend on Pakistani basmati and non-basmati varieties.
• Land-based trade routes connecting Central Asia to Arabian Sea ports via the China-Pakistan Economic Corridor face severe disruption, particularly through Balochistan where military operations and chemical weapons use have been reported.
• Leather goods production and export, primarily from Punjab, encounters operational challenges as the province experiences military action and civil unrest, affecting global footwear and automotive supply chains.
• Transportation infrastructure including highways and rail connections between major commercial centers like Lahore, Karachi, and Islamabad are compromised by widespread security incidents.

Watch points

• Monitor port operations at Karachi and Gwadar for capacity reductions, shipping delays, or force majeure declarations as security conditions deteriorate in surrounding provinces.
• Track international freight forwarder advisories and insurance rate adjustments for Pakistani cargo, as the concentration of critical events may trigger coverage restrictions or premium increases.
• Watch for supplier communication gaps or production halt announcements from textile and manufacturing hubs, particularly in Punjab and Sindh, over the next 2-4 weeks as the security situation develops.