India-Pakistan Trade dispute: Who is in Loss and Profit?

India-Pakistan Trade dispute: Who is in Loss and Profit?

Article 370 of the Indian Constitution; (which had entitled special status to Jammu and Kashmir) has been abolished by the Indian Parliament. In the resistance of this decision the Government of Pakistan has suspended the bilateral trade between India and Pakistan.

In such a situation, the question arises whether Pakistan is in the position to end its trade relations with India and get some political benefits or not? In this article, we will discuss that how this decision will affect the relations between the both countries and what kinds of goods are exported by these countries to each other?

Bilateral Trade in the year 2018-19

According to the report of the Indian Council of Research on International Economic Relations (ICRIER), the size of trade between India and Pakistan is very low. In the financial year 2018-2019 ; India’s exports to Pakistan was only $ 2.17 billion, which is only 0.83% of India’s total exports.

At the same time, India’s imports from Pakistan is also less than US$ 50 crores; this is just 0.13% of India’s total imports.

In the FY 2018-19; the bilateral trade between two counties was around Rs.18 thousand crores which is Rs 1600 more than the last year.

In the total trade between these two countries Indian export accounts around 80% and import accounts around 20%. It means India has comparative advantage in this situation also and Pakistan’s dependence on India is very high.

Bilateral trade between both nations had stood at just $2.4 billion in 2017-18,accounting for a tiny 0.31% of India’s total trade with the world and just about 3.2% of Pakistan’s global trade.
It is worth to mention that the size of Indian economy is around $2,900 billion which is almost nine times larger than Pakistan.

Trade route between India and Pakistan

There are around 138 items exported and imported by road between India and Pakistan. Bilateral trade also take place through road by 50-60 trucks passes daily between India and Pakistan via Wagah border.

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Currently, there are two important trade routes between India and Pakistan. Their names are;
1. Sea route: Mumbai to Karachi

2. Land route through Wagah border

However, business is also done through Chakan Da Bagh in Poonch and Salamabad in Uri.
Who is traded between India and Pakistan?

Indian exports mainly comprises of about 33% textile products and 37% chemical products to Pakistan. On the other hand Indian imports comprises of mainly 49% mineral products and 27% fruits from Pakistan.

Indian import from Pakistan

India; Imports a total of 19 major products from Pakistan. These mainly include dry food, fresh fruits (guava, mango and pineapple), cement, finished leather, spices, wool, rubber products, minerals and ores, inorganic chemicals, alcohol beverages, medical equipment, sporting goods, marine goods, plastic and raw cotton etc.

Indian Export to Pakistan

Pakistan mainly imports tomato from India. However there are some reports in the media says that Pakistan has banned the import of Indian tomato because it contains some toxic elements.

Un-verified news said that after the Pulwama Attack India snatched the “Most Favoured Nation” status of Pakistan that is why India imposed 200% export duty on the tomato exported to Pakistan which increased the price of tomato upto Rs. 200 per kg in Pakistan.

There are 14 items mainly imported by the Pakistan from India. These items includes; tea, sugar, oil cake, cotton yarn, tires, rubber, dye, petroleum oil, raw cotton and chemicals etc.

If we look at the statistics of trade between India and Pakistan, then it is quite clear that both countries do not have heavy business dependence on each other. India trades around 0.5% of its total trade with Pakistan.

In the conclusion it can be said that suspension of trade relations by the Imran Khan with India is just a false promise to himself and the people of his country. The trade suspension does not affect Indian interests at all.

But if both countries leave the path of war and move on the path of peace, then according to a report of the World Bank, there is a possibility of bilateral trade upto $ 35 billion between India and Pakistan

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