Pakistan’s stand on Trade with India
Pakistan had stopped all the trade with India after Abrogation of Article 370 by the Indian Government. Also, the Pakistani Government had announced that it would not talk to India until the Indian Government completely rolled back the changes in Jammu and Kashmir. Lately, Pakistan has been softening its stand. The Wagah border has been reopened for cotton and sugar imports from India almost after two years!
- The Indian exports to Pakistan fell by 16% in 2016-17 after the Uri attacks. In 2015-16 India exported 2.17 billion USD. In 2016-17, the Indian exports to Pakistan fell to 1.82 billion USD. On the other hand, India imported 454.49 million USD from Pakistan in the same year.
- In 2017-18, Indian exports increased by 6% and were at 1.92 billion USD. Indian imports increased by 7.5% and were at 488.56 million USD.
- In 2018-19, the Indian exports to Pakistan again increased by 7.5% and were at 2.07 billion USD. However, India reduced its imports from Pakistan in this financial year. In 2018-19, the imports from Pakistan to India were at 494.87 million USD. This is just 1% increase and is highly low as compared to the previous import growth.
- In 2019 the political relations between the countries entered a deep freeze and India further reduced its imports from Pakistan.
Why is Pakistan easing out its stand?
India has had trade surplus with Pakistan over the years. In 2018-19, Pakistan was one of the top fifty trade partners of India. However, Pakistan was pushed out of the list in 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 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 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 UAE.
India mainly imports oil, Sulphur, edible fruits, mineral fuels, plastering materials, leather, slag and ash and ores from Pakistan.