Table of Contents i i

Subject i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i Page ino.

Introduction............................................................................................................................1

Governing ibody iand ipolicies..................................................................................................4

History iof iIndia-Pakistan ibilateral itrade.................................................................................4

Importance iof iPakistan iin iIndia’s itrade..................................................................................6

Importance iof iIndia iin iPakistan’s itrade..................................................................................7

Recent iTrade istatistics............................................................................................................8

Trade irelations iin irecent itimes................................................................................................9

Conclusion............................................................................................................................10

iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Introduction

International trade assumes a great significance in economic development of both developed

and developing countries. In the last three decades, particularly during 1990s and 2000s, most
of the countries liberalized their trade as a part of economic reforms adopted by them and
facilitated by the WTO policies. One of the most significant developments in the area of
international trade is the emergence of regional groupings especially bilateral trade relations
in the every part of World trading system.
India and Pakistan share a long border but despite this the two countries don't share any
significant trade. Pakistan does not feature among India's top 35 exporters and importers,
while India does not feature among Pakistan's top 10 exporters.

Relations between India and its neighbors have been historically volatile, epitomized in
particular by India and Pakistan. Inter and intra-state conflict have fuelled each other, stifling
trade and economic relations and, in the extreme, evoking the specter of a nuclear conflict.
The share of regional trade and foreign investment between both nations has historically
hovered around 1 per cent of their total global trade. Open conflict and latent tensions
between the two states have restricted trade volumes to levels that are low in relation to their
gross national product (GNP), population, proximity and cultural ties.

The two states have been locked in perpetual conflict either overt or covert, since they gained
independence in 1947, constituting the single largest constraint for bilateral trade. Bilateral
trade between India and Pakistan is as old as the two countries are, but the volume of trade
between them is minuscule relative to the size of their economies. Bilateral trade relations of
India and Pakistan are influenced by their political relations much more than anything else.

In i1948-49 iIndia’s ishare iin iPakistan’s iexports iwas ialmost i56 ipercent iand i32 ipercent iin
i imports. iIn ithe iyear i1955-56 i$41.1 imillion iwere iIndia’s iexports ito iPakistan iand i$209.8
i million iwere iimports ifrom iPakistan ito iIndia. iTrade ibalance iremains iin ifavor iof iPakistan itill
i 1956-57. iIn ithe
year i1957-58 iIndia’s iexports ito iPakistan iwere i$87.8 imillion iand iimports iwere i$87.6 imillion.
i In i1964-65 iIndia iexports iwent ito i$127.7 imillion iand iimports iconstitutes i$219.8 imillion iwith
i 92.1 itrade isurpluses iin ifavor iof iPakistan i.1 iAfter ithe iIndia iPakistan iwar iin i1965, itrade iwas

1
i Javid iAhmad iKhan, i“ iIndia iPakistan iTrade iRelations”, iIOSR-JBM, iVol.5 iNo. i3 i2012, ip.01-10.
i almost inegligible ifor ia iperiod iof inine iyears. iBilateral itrade idid iresume iin i1975-76, ifollowing
i the i1974 iprotocol ifor ithe irestoration iof icommercial irelations ion ia igovernment ito igovernment
i basis, isigned iby ithe itwo icountries iafter ithe i1971 iwar ibut iit iremained iat ian iinsignificant ilevel. i

In ithe iyear i1991-92 iboth icountries iadopted ithe ipolicy iof ieconomic ireforms iand imade iattempts
i to iincrease ithe ibilateral iand imultilateral itrade. iBut inontariff ibarriers icontinuous ias ihurdle,
i concessions igranted iso ifar iare iof itoken isignificance. iSince i1991-92 ithe iIndia iPakistan itrade
i has irelatively iincreasing. iIn i1990-91 iIndian iexport ito iPakistan iwere i$ i46.63 imillion iwhich
i decreased ito i$ i43.13 iin i1991-92. iExports iincreased ito i$ i62.42 imillion iin i1992-93 iwhich iagain
i increased ito i$ i70.23 imillion iin i1993-94. iThere iwere itwofold iincreases iin ithe iexports ifrom i$
i 63.67 imillion iin ithe iyear i194-95 ito i$ i157.22 imillion iin ithe iyear i1996-97. iThe iexports iwere i$
i 143.15 imillion iin i1997-98 ibut idecreased ito i$ i92.95 imillion iin i1999-2000. i2Exports iincreased
i to i$ i186.83 imillion iin i2000-01 ito i$ i206.16 imillion iin i2003-04 iand i$ i286.94 imillion iin i2003-
i 04 iwhich ifurther iincreased ito i$ i521.05 imillion iin ithe iyear i2004-05. iThe iexports ito iPakistan
i were i$ i1348.55 imillion iin ithe iyear i2006-07. iThe ihighest iexports ifrom i1990-91 ito i2008-09
i were ihighest i$ i1945.12 imillion iin ithe iyear i2007-08 ifollowed iby idecrease ito i$ i1084.3 imillion
i in i2008-09 i.
Research Methodology i

The iresearch imethcd iso iused ito iwrite ithis iresearch ipaper iis idoctrinal. iIt iis idoctrinal iin ithe isense
i that iit icomes ifrom ithe icredible isources iherein, ibooks, iarticles ipublished iin irenowned iand
i justified iweb ipages iand ijournals. iThe iproject ialso iuses ideductive ireasoning ifor iresearch. iThe
i source iof iinformation ialso iconsists iof itheoretical iknowledge ithe iresearcher ipossesses ias ia ilaw
i student. iThe isources iso iused iare isecondary iin inature iand ican ibe itreated ias ilibrary-based
i experiment. iTo imake ithe iresearch ipaper, ithe iinstruction igi›’en iby ithe iResearch iSupervisor ihas
i been ifollowed. iThe iwhole iresearch ipaper iis idone iin ian iorganized iway.
Scope and Limitations
i i

The ilimitation iof ithe istudy iis ithose icharacteristics iof idesign ior imethodology ithat iimpacted ior
i influenced ithe iapplication ior iinterpretation iof ithe iresults iof ithe iresearcher’s istudy. iThe
i research iis ilimited ito ieducational ipurposes ionly. iOnly ithat iinformation icould ibe ifurnished
i which iwas iavailable iand ithe iavailability iof iwhich icould ibe iauthenticated. iThe iresearcher iwas

2
i https://pib.gov.in/PressReleasePage.aspx?PRID=1532338
 i unable ito ido ia ithorough iempirical iresearch idue ito inon-availability iof iproper iresources, itime
i and irestrictions ito ithe idomain iof iresearch.

Governing body and policies

i i i i

India iPakistan iTrade iRelations iare ifacilitated iby ithe iFederation iof iIndian iChambers iand
i Commerce i(FICCI) iand ithe iFederation iof iPakistan iChambers iof iCommerce i& iIndustry
i (FPCCI). iFICCI iand iFPCCI iare ithe irepresentatives iof ithe itrade iand ibusiness icommunity iof
i their irespective icountries.3 iThe imain iobjectives iof ithese itwo ichambers iof icommerce iis ito
i facilitate itrade iand ibusiness iopportunities ibetween iIndia iand iPakistan. iFurther, itheir icommon
i goal iis ito iincrease iethical ibusiness iactivities ibetween ieach iother iand iwithin iall iSouth iAsian
i nations. iIndia iPakistan itrade irelations iare ifocused ialong ithe ifollowing ilines:
 Trading ipolicies
 Trading iprocedures
 Trade icontracts
 Trade iadministrative iand iregulatory iprocedures
 Trade iand iinvestment iopportunities
 Business inetworking ifor itrade

History of India-Pakistan bilateral trade

i i i i

The iIndia-Pakistan ibilateral itrade irelations ihas, iover ithe ilast imore ithan ifive idecades, iwitnessed
i a ichequered ihistory, ireflecting ithe ichanging idimensions iof igeopolitical itensions iand
i diplomatic irelations ibetween ithe itwo icountries. iWe ihave imade iour ieffort ito icapture iits
i essential ifeatures iand ilandmarks ias ifollows:
 iIn i1948-49, imore ithan i70 iper icent iof iPakistan’s itrading itransactions iwere iwith iIndia, i63 iper
i cent iof iIndian iexports ito iPakistan. iThe iend iof i1949, ihowever, iwitnessed ia irapid idowntown iin
i Indo-Pak itrade irelations.4

iIndia iPakistan iTrade iRelations, ihttps://business.mapsofindia.com/trade-relations/south-asia/india-

3

pakistan.html i
iIndia-Pakistan iBilateral iTrade: iPast, iPresent i& iFuture, iPHD iChamber, i2013, ihttps://www.phdcci.in/wp-
4

content/uploads/2018/11/6.-India-Pakistan-Bilateral-Trade-Past-Present-Future.pdf.
 iAlthough ibetween iMay i1948 iand iMarch i1960 ias imany ias i11 iIndo-Pak iTrade iand iPayments
i Agreements iwere iconcluded, ithe ibilateral iofficial itrade ideclined ifrom iRs. i184.06 icrore iof
i Indian irupees iin i1948-49 ito iRs. i13.63 icrore iin i1958 iand ito ian iall itime ilow iof iRs.10.53 icrore iin
i 1965-66. i
 iThere iwas ia itrade iembargo ibetween iIndia iand iPakistan iafter ithe iwar iof i1965 iand iit icontinued
i till i1974. iDuring ithis iperiod, iseveral iefforts iwere imade iby iIndia ito irevive ithe itrade, ibut
i nothing itangible icould ibe iachieved. i
 iA itrade iprotocol i(Shimla iAgreement) iwas isigned ion i30 iNovember i1974 ifor ilifting ithe itrade
i embargo iwith ieffect ifrom i7 iDecember i1974.
 iIn ian ieffort ito idiversify itrade ithe iPakistan iGovernment ipermitted iits iprivate isector ito itrade
i with iIndia iwith ieffect ifrom i15 iJuly i1976. i
 iIn iNovember-December i1981 iPakistan ijoined ithe iDelhi iInternational iTrade iFair. iThereafter,
i exchange iof itrade idelegations ibetween ithe itwo ineighbours ioccurred iin iquick isuccession. i
 iIn iJune i1983, ia iJoint iBusiness iCommission iwas iconstituted, iwith ithe imain iobjective ito
i accelerate ithe idecision imaking iprocess ion imatters iseeking igovernment iapproval iand
i suggesting inew iitems ifor ibilateral itrade.5 i
 In 1986, India and Pakistan became signatories to the final document of South Asian
Association for Regional Cooperation (SAARC) which committed itself to promote the
welfare of the people of South Asia.6
 In July 1989, Pakistan agreed to import 322 Indian items. The installation of Nawaz Sharif
Government in 1991 also boosted Indo-Pak trade, and trade touched Rs. 522.59 crore in
1992-93 from Rs. 168.09 crore in 1990-91.
 South Asian Preferential Trading Arrangement (SAPTA), concluded in December 1995,
introduced an integrative trading arrangement in the region. At the end of three rounds of
trade negotiations, a total of 5550 tariff lines have been included for tariff concessions.
 India accorded Most Favoured National (MFN) status to Pakistan in 1996. In the same year,
Pakistan increased its positive list to 600 items that may be legally imported from India. PHD
Research Bureau 6
 In 2003 Pakistan’s Prime Minister announced the inclusion of another 78 items to the
positive list. Most of the permissible items include chemicals, minerals and metal products.
Items such as cardamom and tea still have the high tariffs.

5
https://mea.gov.in/in-focus-article.htm?19005/Simla+Agreement+July+2+1972.
i
6
http://www.pondiuni.edu.in/storage/dde/downloads/ibiv_ftp.pdf.
 In 2003 India’s trade complementarity index (TCI) 1was 50 percent while Pakistan’s TCI
with India was only 14 percent. India’s TCI with Pakistan was highest in 2007 and Pakistan
enjoyed the highest TCI in 2010 thus improving its complementarity with India which is a
positive sign for Pakistan.
 During the third round of Composite Dialogue process discussions in March 2006, both
countries agreed to discuss the new shipping protocol, the deregulations of air services, the
joint registration of basmati rice, an increase in the size of Pakistan’s positive list, proposals
for information-technology-related imedical iservices iand iexport iinsurance iby iIndia, iand iwork
i on ia imemorandum iof iunderstanding ifor icooperation iin icapital imarkets iby iPakistan. i7
 iDuring ithe i6th iRound iof iCommerce iSecretary iLevel iTalks iin iNovember i2011 iat iNew iDelhi,
i both icountries iagreed ito idevelop imechanisms ito iaddress iissues iof iNon-Tariff iBarriers. iThe
i two icountries ihave iinitialled ithree iagreements ii.e., iCustoms iCooperation iAgreement, iMutual
i Recognition iAgreement iand iRedressal iof iTrade iGrievances iAgreement. i
 iIn iNovember i2011 iPakistan idecided ito igrant ithe iMost iFavoured iNation i(MFN) istatus ito
i India ito iboost ibilateral itrade.

Importance of Pakistan in India’s trade

i i i i i

The icalculated ivalues iindicate ithat iPakistan’s iimportance iin iIndia’s itotal imerchandise iimports
i (measured iin iterms iof ishare iin itotal iimports) iis idecreasing i. iThe ishare iwas i$ i0.15 ipercent iin
i the iyear i1994 iwhich ifurther idecreased ito i$ i0.12 ipercent iin i1995 iyear. iIn iyear i1996 ithe ishare iin
i total iexports iwas i0.09 ireached ito i$ i0.5 ipercent iin i1998. iThe ishare iwas i$ i0.14 ipercent iin ithe
i year i1999. iIn i2000 iyear ithe ishare iin itotal iexports ireached ito i$ i0.12 ipercent ibut iagain
i decreased ito i$ i0.08 ipercent iin i2002. iThe ishare iwas i$ i0.12 ipercent iin i2005 ias icompared ito i$
i 0.07 ipercent iand i$ i0.09 iin i2003 iand i2004. iIn ithe ilast itwo iyears ithe ishare iin iimports iremained
i constant iat i$ i0.13. iThe iindicate ithat ithe iPakistan’s ishare iin iIndia’s itotal iimports iis idecreasing.
i On iaverage ithe iPakistan’s ishare iin iIndia’s itotal iimports istood iat i$ i2.15. iOn ithe iother ihand ithe
i Pakistan’s ishare iin ithe itotal iexports iof ithe iIndia iis ihigher ias icompared ito iimport ishare. iThe
i share iof iPakistan’s iin itotal iexports iof iIndia iwas i$ i0.25 ipercent iin i1994.8 iIt iincreased ito i$ i0.33
7
ii http://www.pondiuni.edu.in/storage/dde/downloads/ibiv_ftp.pdf.

8
iKumar iSandeep, iBilateral iTrade iRelations iBetween iIndia iand iPakistan: iRecent iExperience iand iFuture

i Prospects, iIndian iJournal i iof iecony iand ipolicy, iVol.12 iNo.3, i2016,p.535-548.
i percent iin i1995. iThe ishare iwas i$ i0.47 iin i1996. iFrom i1996 ito i2002 ithe ishare iwas idecreasing
i and ireached ito i$ i0.49 ipercent iin i2003 ias icompared ito i$ i0.42 ipercent iin i2002. iIn i2004 ithe ishare
i was i$ i0.68 ipercent ifollowed iby i0.69 iin i2005 iand i1.11 iin i2006. iThe ihighest ishare iwas i1.32 iin
i the iyear i2007. iHowever ithe ishare idecreased ito i0.16 iin i2008. iOn iaverage ithe ishare iof iPakistan
i in ithe itotal iexports iof iIndia iwas i7.68. iIt iis iclear ithat iPakistan’s iimportance iin ithe itotal iimports
i of ithe iIndia iis idecreasing ibut ithe ishare iin ithe iexports iof iIndia iis ishowing iincreasing itrend. iOn
i average ithe iexport ishare iwas imore ithan ithe iimport ishare. iThe iaverage ivalue iof ithe ishare iin ithe
i exports iwas i7.68 iwhich iis isignificantly ihigher ithan ithe iaverage ivalue iof i2.15 iin iimports. iThe
i values iindicates ithat igiven ithe iIndia’s itotal itrade iPakistan’s iexports ifrom ithe iIndia iis
i increasing.

Importance of India in Pakistan’s trade

i i i i i i

The iresults iindicate ithat ion iaverage ithe ishare iof iIndia iin ithe itotal iimports iof ithe iPakistan iis
i decreasing. iThe ivalue iwas i$ i0.71 iin i1994 ito i$ i0.89 iin i1995. iThe ishare iin ithe itotal iimports iwas
i hovering iaround ithe iminimum iand imaximum ivalue iranging ifrom i$ i0.17 iand i$ i5.97 imillion iin
i 2007. iThe ishare iwas i$ i0.29 iin i1996 iand i$ i1.23 iin i1997. iThe ilowest ishare iin itotal iimports iwas
i in iyear i1996. iThe ishare ireached ito i$ i1.37 iin i1998 ifollowed iby idecrease ito i$ i0.91 iin
i 1999.From i2001 ithe ishare iincreased imore icontinuously istood iat i2.71 iin i2005 iand i4.52 iin
i 2006. iThe ishare iwas ihighest iin i2007. iHowever ithe ishare idecreased iin i2008 iand istood iat i2.56.
i As ifar ias ithe iIndians ishare iin ithe itotal iexports iof ithe iPakistan iis iconcerned ifrom ithe ilast iyears
i the ishare iis iincreasing. iThe ishare iwas i$ i0.56 iin i1994 iand ishows ia idecreasing itrend itill i1997. iIn
i 1998 ithe ishare iwas iincreased ito i$ i2.52 ibut iagain iin iyear i1999 ithe ishare istood iat i$ i0.81. iThe
i share iwas i$ i0.7 ilowest iin ithe ientire isample iperiod iin ithe iyear i2001. iIn ithe iyear i2003 ithe ishare
i was i0.48 isignificantly ihighest ithan i2001 ibut ilowest ithan i$ i0.71 iin ithe iyear i2004. iThe ivalue
i reached ito i1.21 iin ithe iyear i2005 ifollowed iby icertain iincrease ito1.91 iin i2006. iThe ishare i$ i1.61
i in iyear i2007 iand i$ i1.82 iin iyear i2008. iIt iis iclear ithat ithe ishare iwas iabove iunity ifrom ithe ilast
i four iyears iI.e. ifrom ithe iyear i2005 ito i2008.The icomputed iaverage ishare iof iIndia iin iPakistan’s
i exports iwas ihigher ithan ithe ishare iin ithe itotal iimports. iIndia’s ishare iin ithe iPakistan’s itrade iis
i higher ithan ithe iPakistan’s ishare iin ithe itotal itrade.9

9
i REPORT iON iCURRENCY iAND iFINANCE, ihttps://rbidocs.rbi.org.in/rdocs/Publications/PDFs/51010.pdf.
Recent Trade statistics
i i i

Pakistan ihas iconsistently ifaced ia itrade ideficit iwith iIndia i– iwhile iPakistan’s iexports iincreased
i from i$ i84 imillion iin i2003 ito i$ i312 imillion iin i2015, iimports iincreased iby i639 ipercent, ifrom i$
i 226 imillion iin i2003 ito i$ i1,669 imillion iin i2015. iThe itrade ideficit ihowever iimproved iin i2015
i when iit iwas i$ i1.36 ibillion, idown ifrom i$ i1.71 ibillion iin i2014.10

Bilateral iTrade iin ithe iyear i2017-18

Bilateral itrade ibetween iboth inations ihad istood iat ijust i$2.4 ibillion iin i2017-18, iaccounting ifor ia
i tiny i0.31% iof iIndia’s itotal itrade iwith ithe iworld iand ijust iabout i3.2% iof iPakistan’s iglobal itrade.
It iis iworth ito imention ithat ithe isize iof iIndian ieconomy iis iaround i$2,900 ibillion iwhich iis ialmost
i nine itimes ilarger ithan iPakistan.

Bilateral iTrade iin ithe iyear i2018-19

According ito ithe ireport iof ithe iIndian iCouncil iof iResearch ion iInternational iEconomic
i Relations i(ICRIER), ithe isize iof itrade ibetween iIndia iand iPakistan iis ivery ilow. iIn ithe ifinancial
i year i2018-2019 i; iIndia's iexports ito iPakistan iwas ionly i$ i2.17 ibillion, iwhich iis ionly i0.83% iof
i India's itotal iexports. i11
At ithe isame itime, iIndia's iimports ifrom iPakistan iis ialso iless ithan iUS$ i50 icrores; ithis iis ijust
i 0.13% iof iIndia's itotal iimports.

In ithe iFY i2018-19; ithe ibilateral itrade ibetween itwo icounties iwas iaround iRs.18 ithousand icrores
i which iis iRs i1600 imore ithan ithe ilast iyear.

In ithe itotal itrade ibetween ithese itwo icountries iIndian iexport iaccounts iaround i80% iand iimport
i accounts iaround i20%. iIt imeans iIndia ihas icomparative iadvantage iin ithis isituation ialso iand
i Pakistan's idependence ion iIndia iis ivery ihigh.

Indian iimport ifrom iPakistan

India iimports ia itotal iof i19 imajor iproducts ifrom iPakistan. iThese imainly iinclude idry ifood, ifresh
i fruits i(guava, imango iand ipineapple), icement, ifinished ileather, ispices, iwool, irubber iproducts,

ihttps://economictimes.indiatimes.com/news/economy/foreign-trade/pakistan-says-trade-with-india-
10

plunges-significantly/articleshow/73544675.cms?from=mdr.
i i i iNormalizing iIndia iPakistan iTrade, iIndian iCouncil iFor iResearch iOn iInternational iEconomic iRelations,
11

i2013.
i minerals iand iores, iinorganic ichemicals, ialcohol ibeverages, imedical iequipment, isporting
i goods, imarine igoods, iplastic iand iraw icotton ietc.

Indian iExport ito iPakistan

Pakistan imainly iimports itomato ifrom iIndia. iHowever ithere iare isome ireports iin ithe imedia isays
i that iPakistan ihas ibanned ithe iimport iof iIndian itomato ibecause iit icontains isome itoxic ielements.

After ithe iPulwama iAttack iIndia isnatched ithe i“Most iFavoured iNation” istatus iof iPakistan ithat
i is iwhy iIndia iimposed i200% iexport iduty ion ithe itomato iexported ito iPakistan iwhich iincreased
i the iprice iof itomato iupto iRs. i200 iper ikg iin iPakistan.

There iare i14 iitems imainly iimported iby ithe iPakistan ifrom iIndia. iThese iitems iincludes; itea,
i sugar, ioil icake, icotton iyarn, itires, irubber, idye, ipetroleum ioil, iraw icotton iand ichemicals ietc.12

If iwe ilook iat ithe istatistics iof itrade ibetween iIndia iand iPakistan, ithen iit iis iquite iclear ithat iboth
i countries ido inot ihave iheavy ibusiness idependence ion ieach iother. iIndia itrades iaround i0.5% iof
i its itotal itrade iwith iPakistan.

Trade relations in recent times

i i i i

Relations ibetween iIndia iand iPakistan iworsened iwhen iPakistan idecided ito idowngrade idiplomatic ities iwith
i India, irecall iits ihigh icommissioner ifrom iNew iDelhi, iexpel ithe iIndian ienvoy ito iIslamabad iand
i suspend ibilateral itrade.
These idecisions iwere itaken iat ia ihigh-level imeeting ichaired iby iPakistan iPrime iMinister iImran
i Khan iin iresponse ito ithe iNarendra iModi igovernment's imove ito iscrap ithe ispecial istatus iaccorded ito iJammu iand iKashmir
i under iArticle i370 iof ithe iIndian iConstitution.13
Pakistan ihas itermed iIndia's iaction ias ia iviolation iof iUnited iNations' iresolutions ion iKashmir
i and iupped ithe iante ito iraise ithe imatter iat ivarious iinternational iforums, iincluding ithe iUnited
i Nations iand ithe iOrganisation ifor iIslamic iCooperation. iWhile iannouncing idowngrading iof
i diplomatic irelations iand isuspension iof ibilateral itrade, iPakistan ialso iobjected ito iIndia's
i decision iof ibifurcating ithe ierstwhile istate iof iJammu iand iKashmir iinto itwo iUnion iTerritories.

12
https://iasscore.in/current-affairs/prelims/collapsing-trade-between-india-and-pakistan.
i

ihttps://www.indiatoday.in/news-analysis/story/pakistan-suspends-trade-with-india-imran-khan-article-370-
13

jammu-kashmir-1578817-2019-08-09
Worsening iof idiplomatic irelations ibetween ithe itwo icountries iis inot isomething inew, iespecially
i when iviewed iin ithe iimmediate icontext iof ipast ifew iyears. iHowever, iwhat iis inew ithis itime iis
i Pakistan's idecision ito icompletely isuspend ibilateral itrade iwith iIndia.
Pakistan's iannouncement icomes inearly ifive imonths iafter iIndia idecided ito irevoke ithe iMost iFavoured iNation i(MFN) istatus ithat iit
i had iaccorded ito iPakistan iin i1996. iThis idecision iwas itaken iin ithe iaftermath iof ithe iPulwama
i terror iattack iin iJammu iand iKashmir iwhere i40 iIndian isecurity ipersonnel iwere ikilled iin ia
i suicide iblast. iIndia ihas ialleged ithat ithe iterror iattack iwas iperpetrated ifrom iPakistan, ia icharge
i the ilatter ihas idenied.
The iwithdrawal iof iMFN istatus iis igoing ito ihurt iPakistan ito isome iextent. iWithdrawal iof ithis
i status imeans iIndia ican inow ienhance icustoms iduties ito iany ilevel ion igoods icoming ifrom
i Pakistan. iIndia iimports ifruits, icement, ileather, ichemicals iand ispices ifrom iPakistan. iHowever,
i even iif iIndia iimposes ipunitive iduties ion igoods, iit iis inot igoing ito iimpact iPakistan imuch. iThat's
i because iIndia-Pakistan itrade iis ivery ilow. iAccording ito ia iWorld iBank ireport, ithe icurrent ilevel
i of itrade ibetween iPakistan iand iIndia iis ivalued iat ia ilittle iover i$2 ibillion, iwhile ithe icapacity iis ias
i high ias i$37 ibillion.14 iThe imove iby ithe igovernment ihas imore iof isymbolic ivalue.

Conclusion

Today ithe ibilateral itrade ibetween iIndia iand iPakistan iare inegligible ibut iin ithe iinitial iyears iof
i independence, idespite ithe ibloody iPartition, iIndia iand iPakistan ihad iflourishing itrade ities.
In ithe iconclusion iit ican ibe isaid ithat isuspension iof itrade irelations iby ithe iImran iKhan iwith iIndia
i is ijust ia ifalse ipromise ito ihimself iand ithe ipeople iof ihis icountry. iThe itrade isuspension idoes inot
i affect iIndian iinterests iat iall. iBut iif iboth icountries ileave ithe ipath iof iwar iand imove ion ithe ipath
i of ipeace, ithen iaccording ito ia ireport iof ithe iWorld iBank, ithere iis ia ipossibility iof ibilateral itrade
i upto i$ i35 ibillion ibetween iIndia iand iPakistan.

Bibliography

ihttps://m.economictimes.com/news/politics-and-nation/no-longer-a-most-favoured-nation-will-that-hurt-
14

pakistan/articleshow/68007834.cms. i
 1. India Pakistan trade strengthening economic relations by Nisha Taneja.
2. India Pakistan and war and peace by JN Dikshit.
3. India nad Pakistan;Conflict and Cooperation by Stanley Wolpert.

References

1. ihttps://m.economictimes.com/news/politics-and-nation/no-longer-a-most-favoured-
nation-will-that-hurt-pakistan/articleshow/68007834.cms. i
2. https://www.indiatoday.in/news-analysis/story/pakistan-suspends-trade-with-india-
imran-khan-article-370-jammu-kashmir-1578817-2019-08-09