Modernizing Pakistan's trade ecosystem: The role of artificial intelligence in digital customs and trade facilitation

As AI technology evolves, it has opened up new prospects for enhancing customs management and promoting international commerce. Continuous digitalization efforts such as Web-Based One Customs (WeBOC), Pakistan Single Window (PSW), Faceless Customs Assessment (FCA), and Central Appraising Unit (CAU) serve as a starting point for the technological modernization in Pakistan. The present study focuses on how AI can transform the trade landscape in Pakistan, especially in terms of efficiency in digital customs management, trade facilitation, and transparency and compliance. The research method used is a quantitative method with cross sectional survey by the respondents of customs officers, importers, exporters, clearing agents and other trade parties. Partial Least Squares Structural Equation Modelling (PLS-SEM) is used to evaluate the proposed relationships using SmartPLS 4. The results revealed that the adoption of AI is statistically significant and positively related to customs operational efficiency, trade facilitation, and transparency and compliance based on simulated data of 250 respondents. The most prominent association with the use of AI is that of customs operational efficiency, followed by trade facilitation and transparency and compliance. The research emphasizes the role of AI-driven solutions in streamlining customs operations, minimizing paperwork, and enhancing regulatory oversight. It also highlights the need for a robust digital infrastructure, institutional capabilities, data quality, and human oversight in the responsible integration of AI. The study offers a template for how AI can be leveraged for a more streamlined, transparent, and competitive trade environment in Pakistan.