Once a major issue, cross-border trade now put on back burner

The bilateral trade between India and Pakistan is now in abeyance keeping in view the tension between the two nuclear armed neighbours who almost came close to waging a war. Opening of the cross-border trade was a major issue in this part of the country during the General Election held last year. However, the Pahalgam terror strike and hostilities between India and Pakistan have put the issue on the back burner which no political party is likely to take up soon.

Says Jatinder Khurrana, an importer: “Yes, in the present scenario, trade between India and Pakistan seems like a distant possibility due to ongoing political tensions, border issues and lack of trust between the two governments. Diplomatic ties are strained. In such an environment, restarting trade appears to be unlikely in the near future and it is likely to take a long time.”

However, history shows that even small steps in trade or people-to-people contact can sometimes lead to larger breakthroughs.

Khurrana added that trade between India and Pakistan can bring many benefits to both countries, even though there are political tensions. It can help improve the economy by creating jobs, lowering prices and increasing the availability of goods.

People in both countries can get access to products that are cheaper or better in quality. Trade also helps build connections between ordinary people, which can reduce misunderstandings and promote peace over time.

Rajan Bedi, an importer and exporter, says bilateral trade between India and Pakistan has indeed taken a hit due to the ongoing tensions between the two countries. A major land border crossing, Attari-Wagah, has been closed, impacting formal trade. It will hit the inflation-ravaged Pak citizens because India imports nothing from Pakistan. Our import from Pak is absolutely zero, whereas Pakistan imported Indian merchandise worth $448 million during (April-January of FY25), commodities such as essential medicines, sugar, chemicals, auto components and petroleum products.

The border closure may halt formal trade but not demand. Pakistan will continue sourcing Indian goods, just at a higher cost and through third countries. Hence, the formal trade halt impact on India is likely to be minimal.