Who is suffering more due to the lack of trade between India and Pakistan?

Posted on 19th Apr 2021 by rohit kumar

At the beginning of April, India-Pakistan bilateral relations once again came into the limelight and it was due to the withdrawal of the two-year unilateral ban of Pakistan's Finance Minister with India.

 

However, Pakistan's cabinet reversed the decision the very next day. India has already indicated that it is ready to continue trade but has left the responsibility to Pakistan.

 

Despite this, both countries are not major trading partners in recent decades, while some industries and markets depend on each other and are being hit heavily due to the ban on trade.

 

Business difficulties play a large role at a very small level and also affect the lives of thousands of people.

 

In 2018, a World Bank report said that if the two countries remove high tariffs, tough visa policies, and cumbersome procedures, trade between them could increase from $ 2 billion to $ 37 billion.

 

Why did the business stop?

 

Trade between the two countries has been closed since 2019 when two incidents related to India-administered Kashmir occurred.

 

In Pulwama, Kashmir, 40 security forces were killed in an extremist attack, for which India blames Pakistan.

 

After this, the Government of India snatched the record of Most Favored Nation of Pakistan and raised the customs duty on the goods imported from there to 200%.

 

The impact was so severe that between January and March, imports from Pakistan fell by 91%.

 

According to the monthly statistics of the Indian Ministry of Commerce and Industry, India imported goods worth $ 32 million in January, which increased to $ 18.8 million in February and $ 28 million in March.

 

Subsequently, in August 2019, when India abolished Article 370 granting special state status to Jammu and Kashmir, Pakistan banned imports from India. Due to this, exports from India to Pakistan fell by 90% in July and September.

 

India exported goods worth $ 12.03 million in July, after which it was only $ 5.23 million in August and $ 12.4 million in September.

 

India also banned trade from Jammu and Kashmir along the Line of Control in April 2019. India claims that there were intelligence reports that extremist groups based in Pakistan can smuggle illegal weapons, counterfeit notes, and narcotics through it.

 

Impact of the ban on the economy

 

Due to the cancellation of trade between the two countries, it appears that this has not affected their total import and export market, because it has a very small share in the trade of the two countries.

 

However, there is a slight dependence on India in the matter of Pakistan's trade.

 

According to United Nations Comtrade Statistics, in the last 15 years till 2018, India's imports from the world were $ 5.2 trillion, but only $ 5.5 billion from Pakistan. This was just 0.1% of the country's total imports. At the same time, exports from India to Pakistan were only 0.7% of its total exports.

 

During this period, Pakistan's share in India's total imports did not exceed 0.16% in any year. At the same time, its share in India's total exports never increased beyond 1.1%.

 

At the same time, in terms of imports from India, the share of total imports of Pakistan has been 3.6%, while in terms of exports, the share of total exports of India has been 1.5%. During this period, India's share in total imports of Pakistan reached 4.4% while its share in total exports of the country was 2.1%.

 

Harm to the common man

 

It is seen in media reports that the trade ban has a profound effect on the economy, but it affects the people differently.

 

Nikita Singla, Associate Director at BRIEF, has written on the news website 'The Wire' on humanitarian damage due to business stoppage. She says that it is reported in the media of both India and Pakistan that the stagnation of trade is not affecting the economy of their countries, whereas many people have lost their livelihood due to this.

 

Singla writes, "I have met children who were expelled from private schools because their father's business had collapsed. I met a truck owner of Attari Truck Union who decided to come from Amritsar to Hong Kong in 2010 Was because he saw possibilities in trade on the Wagah-Attari border and had bought 30 trucks. "

 

"I met a father who, along with his three sons, used to work in loading and unloading trucks in trucks and was making a living through them. They are all now unemployed, one of them 'educated' sons." Was able to find employment, who is a Granthi in a Gurdwara Sahib and gets only two hours of work. "

 

The BRIEF report estimates that 9,354 families in the city of Amritsar have been directly affected by the only person earning at home due to the impact on bilateral trade.

 

They have included businessmen, customs agents, truck owners and drivers, laborers, shopkeepers, petro pump workers, and mechanics among others.