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Editorial: Pakistan’s Trade Ban and its Impact on India

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Port Wings, 14 August 2019:

Though India will not be facing any negative impact from the suspension of trade by Pakistan as our imports from neighbour are valued at less than a fourth of total exports, it will certainly damage any chance for rapprochement between both the neighbours.

However, Pakistan’s decision to suspend bilateral trade with India may hit its important sectors like textiles and pharmaceuticals, whom heavily rely on imports of raw materials from India.

According to a report in Indian Express quoting the Ministry of Commerce, in 2018-19, Pakistan imported $550.33 million worth of cotton and $457.75 million worth of organic chemicals from India.

Furthermore, provisional data for April-June 2019 shows that India has so far exported a total of $452.51 million worth of goods to Pakistan, with $127.87 of this being organic chemicals and $48.33 million, cotton.

According to Commerce Ministry’s statistics, Pakistan ranks behind countries like Sri Lanka, Bangladesh and Nepal in India’s trade list with South Asian countries.

India’s major imports from Pakistan, including mineral fuels and edible fruit and nuts, were about $131.29 million and $103.27 million. Its total imports from the region in 2018-19 were valued at $494.87 million, according to the Ministry.

An expert of Indian Council for Research on International Economic Relations Nisha Taneja says cotton and organic chemicals are two of the largest items India exports to Pakistan, and both of these are actually raw materials for their industries.  
According to her, it is a precarious situation for Pakistan, because the decision to halt trade with India will affect the country’s textiles and pharmaceuticals industries.

Ever since the Pulwama attack on CRPF personnel and subsequent Balakot attacks, situation turned from bad to worse in diplomatic relations between India and Pakistan.

Analysts believe that even though the relationship remained strained for quiet sometime, trade between the two countries has mostly been positive and cooperative in terms of catering to instances of shortages in goods.

Due to ban on airspace, most of the airlines faced severe delays and monetary losses due to avoidance of Pakistani airspace. And, Indian Airlines (Air India) faced huge losses due to that.

The latest decision of suspending trade with India may be a symbolic protest by Islamabad against the New Delhi’s internal decision of bifurcating Jammu and Kashmir, it could well lead to another long-drawn confrontation on economic front.

However, Pakistan this time not introducing any ban on using its airspace for passenger planes, and it’s good news for especially the Air India. But, it remain to see how India challenges Pakistan’s unwarranted incursion in nation’s internal matter.

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