India-Pakistan Bilateral Trade – the Trade that WAS
Trade Overview (2018–2025)
India and Pakistan have experienced a tumultuous trade relationship, heavily influenced by political tensions and policy decisions. In the fiscal year 2018–19, bilateral trade peaked at approximately $2.56 billion, with India exporting $2.06 billion worth of goods to Pakistan and importing $494.8 million in return.
However, following the Pulwama terrorist attack in February 2019, India revoked Pakistan’s Most Favoured Nation (MFN) status and imposed a 200% import duty on Pakistani goods. Pakistan responded by suspending bilateral trade. Consequently, trade volumes plummeted
-
2019–20: India’s exports to Pakistan dropped to $816 million, and imports fell to $13.97 million.
-
2020–21: Exports further declined to $329 million, with imports at $0.4 million.
-
2022–23: India exported $627.1 million worth of goods, while imports were $20.11 million.
-
2023–24: Exports rebounded to $1.18 billion, but imports remained low at $2.88 million. April–January 2024–25: India’s exports to Pakistan stood at $447.65 million, with imports at a mere $0.42 million.
Key Export Commodities
India’s exports to Pakistan have primarily included:
-
Organic chemicals: $129.55 millionTrading
-
Pharmaceutical products: $110.06 million
-
Sugar and sugar confectionery: $85.16 million
-
Auto components: $28.57 million
-
Petroleum products: $11.63 million
-
Fertilizers: $6 million
-
Plastics: $4.16 million
-
Rubber: $1.88 million
-
Vegetables: $3.77 million
-
Coffee, tea, and spices: $1.66 million
-
Cereals: $1.39 million
Trade via Third Countries
Despite official trade restrictions, goods have continued to flow between the two countries through indirect routes, notably via Dubai, Singapore, and Sri Lanka. This indirect trade is estimated to add 15–25% to the cost of goods. Analysts suggest that while official trade figures are low, actual trade volumes may be higher due to these unofficial channels.
After the Pahalgam attacks by the terrorists on Indian Soil, India has stopped all kinds of business, diplomate, trade and political relations with Pakistan. No third country exports or imports are allowed. Borders are locked, Indus Waters Treaty is in abeyance. India taken control over the Indus river and its subsidiaries that flow through Indian land into Pakistan. Chenub, River belonging to Pakistan is blocked by India with its dam and disrupted the flow of water to the lands of Pakistan.
India’s abeyance of the Indus Waters Treaty in 2025 marks a turning point in South Asian geopolitics. While not a formal withdrawal, the move has strategic, humanitarian, and diplomatic consequences. If unresolved, it could trigger long-term environmental and security challenges, both regionally and globally.
Thank you