After the Abrogation of Article 370 by the India, Pakistan had stopped all the trade with India since 2019. Also, the Pakistani Government had announced that it would not talk to India until the Government of India completely rolled back the changes in the union Territory Jammu & Kashmir. Lately, Pakistan has been softening its stand. The Wagah border (Amritsar, Punjab) has been reopened for cotton and sugar imports from India almost after two years!

Bilateral Trade

  • India-Pakistan harmed after the Uri attacks, in 2016-17 Indian exports to Pakistan fell by 16 per cent. In the FY 2015-16 India exported $2.17 billion. In the FY 2016-17, Indian exports to Pakistan fell to $1.82 billion. On the other side, India imported $454.49 million from Pakistan in the same year.
  • In the FY 2017-18, Indian exports increased by 6 per cent and were at $1.92 billion. Indian imports increased by 7.5 per cent and were at $488.56 million.
  • In the FY 2018-19, Indian exports again increased by 7.5 per cent and were at $2.07 billion. However, India reduced its imports from Pakistan in this FY. In the FY 2018-19, the Indian imports from Pakistan were at $494.87 million. This is just 1 per cent increase and is highly low as compared to the previous import growth.
  • In the year 2019 the political relations between India and Pakistan entered a deep freeze and India further reduced its imports from Pakistan.

Why is Pakistan easing out its stand?

As per the reports, India has had trade surplus with Pakistan over the years. In the FY 2018-19, Pakistan was one of the top 50 trade partners of India. However, Pakistan was pushed out of the list in the FY 2019-20. This affected Pakistan badly as the country is heavily dependent on India for its raw materials, especially in pharmaceuticals and textiles industries.

In the FY 2018-19, organic chemicals and cotton accounted for half of Pakistani imports from India. The other major Pakistani imports from India are nuclear reactors, plastic, dyeing extracts, boilers, mechanical appliances, machinery. After the ban, the imports of these products fell drastically. The COVID-19 Pandemic crisis worsened the situation for Pakistan. This is now forcing Pakistan to ease trade relations with India.

Impacts on India

While Pakistan is facing troubles due to the trade ban, India has been stable in spite of the issue. This is because India has found alternate trading destinations such as Saudi Arabia, Chile and United Arab Emirates.

India mainly imports oil, Sulphur, edible fruits, mineral fuels, plastering materials, leather, slag and ash and ores from Pakistan.

Pakistan’s step on Trade with India Pakistan’s step on Trade with India