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Tuesday, July 16, 2024

Pakistan-India eyeing trade resumption

The ban on trade with India may be lifted soon as the recent get well soon messages from Indian Prime Minister Narendra Modi to Prime Minister Imran Khan are said to have melted ice. Pakistan banned trade with India in August 2019 following LOC violations.

Pakistan and India are looking to resume trade soon after almost two years. The message from the Indian Prime Minister to Pakistan’s Prime Minister on Pakistan Day, 23rd March is an indication that the relations between the two neighbors are going in a positive direction.

Read More: Modi’s letter to Pakistan-a tactical retreat by India?

Similarly, Mr. Modi in a tweet on 20th March wished a speedy recovery for PM Khan, after news of the latter contracting Coronavirus became public.

Answering a question regarding the resumption of trade between two countries following the recent ceasefire agreement, ” minister of state for commerce and industry Hardeep Singh Puri in Lok Sabha (the lower house of India’s bicameral parliament) said, “India desires normal relations, including on trade with all countries, including Pakistan. Pakistan unilaterally suspended bilateral trade with India in August 2019. It is for Pakistan to review its unilateral measures on trade.”

On the other hand, speaking at the last week’s Islamabad Security Dialogue, Army Chief General, Qamar Javed Bajwa said: “It is time to bury the past and move forward,” while talking about relations with India.

Similarly, at the Dialogue, various speakers pointed the fact that Pakistan has not been taking the advantage of the ASEAN + 6 as other countries in the region are in terms of economic benefit.

Adviser to Prime Minister Imran Khan on Commerce and Investment, Mr. Abdul Razak Dawood has also expressed similar sentiments, saying that the politics should be kept separate from the trade.


The situation between the two nations worsened following the Pulwama attack on 14th February 2019 and subsequently the 26th February 2019 failed Balakot Airstrike.

Tensions rose on the Line of Control and the violations were on the rise. India withdrew the Most Favoured Nation (MFN) status it had granted Pakistan in 1996 and imposed a customs duty of 200% on all goods coming from Pakistan.

On August 10, 2019, Pakistan imposed a ban on trade with India due to the mentioned reason, and trade relations between two neighbors were suspended.

Recently, however, the textile industry has been asking the government to allow the import of cotton yarn from India.

Read More: Is India the answer to Pakistan’s current cotton yarn crisis?

At a recent meeting of the National Assembly Standing Committee on Commerce, Syed Naveed Qamar, Chairman of the Committee, maintained that cotton should be imported from all countries, including India, “wherever it is cheap”, adding that the import of expensive cotton will have a trickle-down effect on value chains.