In this study regional trade macro econometric model estimated for Pakistan. For this purpose data for five countries used like Pakistan, India, China, Bangladesh and Sri Lanka where Pakistan is the main country and remaining are trading partners. The main purpose of the study is to estimate a regional trade macro econometric model and also see the impact of policy shocks like monetary and fiscal policy shocks on our country and vice versa. The regional trade macro econometric model basically consist of six main blocks that include; the product block, aggregate demand block, supply block, trade block, monetary block and fiscal block. In this study we use Structural Vector Autoregressive Approach for the estimation purposes and use time series data for the period 1971 to 2015. Results shows that the country responds to changes in the region and the changes in the country also impact the region. Hence, we can come to the conclusion that the policies in the region impact country and vice versa. Regional monetary shock impacts Pakistan but in terms of fiscal shocks, not the regional but rather the fiscal shock of Pakistan impacts Pakistan. Supervisor:- Dr. Ahsan ul Haq Satti Co-Supervisor:- Dr. Mahmood Khalid