India - Pakistan Trade Relations | Where is Both Countries

India Pakistan trade relations despite the obstructive behaviour of Pakistan to allow a trade to materialise, the two sides have tremendous potential for bilateral trade. 

History of India Pakistan Trade

In 1996, India gave the MFN status to Pakistan, which is reciprocated in 2012 The bilateral trade is around 2.5 USD billion despite a potential of 20 USD billion. It is imperative for the two to explore cooperation in trade and establish a regional value chain in the globalised and integrated world. 

Some experts have suggested that the two can explore product-specific regional value chains in sectors like textiles, sports goods and surgical instruments.

Trade Condition

For instance, in Surat (GJ) and Tiruppur (TN), there in Lahore and Faisalabad. Similarly, in India, there is a huge demand of Pakistani salwar kameez and production of raw materials of textiles that can be linked to production centres wedding attire, which can be explored as a sector. 

Similarly, Pakistan is gradually emerging as a global Supplier of sports goods. Sialkot in Pakistan is a manufacturing hub for sports goods from football to gling gloves. The footballs manufactured here have been used in the FIFA World Cup also, However, the manufactures of these products in Sialkot need high-quality raw materials and semi-finished products, which at present they import from Thailand.

This is where India can step in India has high-quality latex, rubber and football bladders, which it can directly expertise Again, Sialkot is known for its in surgical instruments and is a global supplier to the US and major powers in Europe. India is provide to Sialkot major importer of surgical instruments. At present, it imports them from developed states of the world at very high prices. A direct import from Sialkot is economically and logistically conducive for India. 

For instance, India can enhance the supply of stainless steel to Pakistan, which in turn will be a ready raw material available to manufacturers in Sialkot. Sialkot enjoys a historical edge because till 1947, Jalandhar and Stalkot were integrated manufacturing hubs. After the partition the skilled Labour moved to Sialkot. 

Way Forward

The hope of the trade is that it will help to create a constituency of peace, which will enable Pakistan to relinquish terror and Join the economic race. But, the ISI finds no merit in the argument of trade with India and is keen to skilfully use its geographical position to harm India. 

After the Pulwama attack in 2019, India has also hiked the duties for bilateral trade and withdrawn the MFN status with Pakistan. Thus, the politics have again taken over economics in the bilateral ties.