Rising Tensions Take Toll On India-Pak Trade Ties

SRINAGAR: Growing diplomatic tensions coupled with frequent border clashes since last year’s militant attack on an army base in Jammu and Kashmir have further shrunk the already meagre trade between India and Pakistan.

Mounting hostilities have virtually shattered the dream of boosting the trade volume between the two nuclear-armed neighbours from the current $2.5 billion to $6 billion over the next two years as businessmen from both sides see no immediate signs of a thaw in ongoing tensions.

“There is already a 20 percent decrease in trade between the two sides, and it is likely to further decline in the months to come if the ongoing tensions are not stemmed,” S. M. Munir, chairman of the India-Pakistan Business Council (IPBC), told a foreign news agency.

“India has been denying visas to Pakistani businessmen [since last September], which is affecting the bilateral trade,” he added.

Pakistan’s exports to India total $402.7 million, or 1.6 percent of its overall exports – less than a fourth of India’s exports to Pakistan, which stand at $1.7 billion or 3.8 percent of its total exports.

Pakistan accounts for less than 0.5 percent of India’s trade, and India represents a little over 3 percent of Pakistan’s total foreign trade.

Pakistan’s major exports to India include leather goods, dried fruits (especially dates), surgical instruments, zinc, and oil seeds, while it imports cotton, organic chemicals, plastic, dried vegetables, artificial fibers, tires, faux jewelry, and woven fabrics.

In 1996 India gave most-favourite nation (MFN) status to Pakistan, but this was not reciprocated, mainly due to opposition from Pakistani stakeholders, especially agriculturalists, fearing that a bigger Indian market could engulf their far smaller one.

Since a brazen attack last September near the town of Uri, in Jammu and Kashmir, killing 19 Indian soldiers, the two sides have been engaged in frequent border clashes that have claimed over 60 lives on both sides, civilians and soldiers alike.

New Delhi accuses Islamabad of having a hand in the audacious attack. Denying the charge, Pakistan itself criticizes India’s repression of pro-independence protests in the disputed Himalayan region of Kashmir that began last July, in which more than 100 Kashmiri civilians have been shot dead by Indian forces and thousands more injured.

Last September’s attack led to Indian Prime Minister Narendra Modi claiming that Indian forces carried out surgical strikes in the Pakistan administered Kashmir (Pak) killing several “militants”.


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