{"id":51919,"date":"2019-09-05T17:42:56","date_gmt":"2019-09-05T12:12:56","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?page_id=51919"},"modified":"2019-09-05T17:43:04","modified_gmt":"2019-09-05T12:13:04","slug":"answered-critically-analyse-the-repercussions-of-india-pakistan-face-off-on-bilateral-trade-between-both-nations","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-critically-analyse-the-repercussions-of-india-pakistan-face-off-on-bilateral-trade-between-both-nations\/","title":{"rendered":"[Answered] Critically analyse the repercussions of India-Pakistan face-off on bilateral trade between both nations."},"content":{"rendered":"\n
Demand of the question<\/strong>
Introduction.<\/strong> Contextual Introduction.
Body. <\/strong>Impact of face-off on trade. Is it a serious situation?
Conclusion. <\/strong>Way forward. <\/td><\/tr><\/tbody><\/table>\n\n\n\n

The India-Pakistan face-off in the recent period has impacted trade on both sides. In the wake of the Pulwama attack, India withdrew the Most Favoured Nation (MFN) status to Pakistan. The government of India had suspended cross-LoC trade in 2019, on receiving reports that cross-LoC trade routes were being misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency. Subsequently, it imposed 200% customs duty on all Pakistani goods coming into India. More recently, post the Jammu and Kashmir Reorganisation Bill, Pakistan cut off diplomatic and economic ties with India.<\/p>\n\n\n\n

Impact of\nrecent face-off on trade: <\/strong><\/p>\n\n\n\n

  1. In 2018-19, bilateral trade between India and\nPakistan was valued at $2.5 billion. In this period, India\u2019s exports to\nPakistan accounted for $2.06 billion and imports from Pakistan were at $495\nmillion. Both has declined.<\/li>
  2. India\u2019s decision in regards with the withdrawal\nof MFN status and imposition of 200% duty has hurt Pakistan\u2019s exports to India.\nThe exports fell from an average of $45 million per month in 2018 to $2.5\nmillion per month in the last 4 months.<\/li>
  3. With Pakistan deciding to completely suspend\nbilateral trade, cotton exports from India to Pakistan might get affected the\nmost, eventually hurting Pakistan\u2019s textiles.<\/li>
  4. Border economies owe their existence to cross-border\neconomic opportunities. These economies are hurt most by India-Pakistan\nface-off. E.g Amritsar is land-locked, and traditionally has no significant\nindustry. Since 2019, 5000 families have been directly affected in Amritsar\nbecause of dependence on bilateral trade.<\/li><\/ol>\n\n\n\n

    Is it a worrisome\nsituation for India?<\/strong><\/p>\n\n\n\n

    1. On a deeper analysis, it appears that Pakistan’s\ndecision to temporarily suspend trade ties will not have much impact on both\nthe nations. Trade between both nations had stood at just $2.4 billion in\n2017-18, accounting for a mere 0.31% of India\u2019s total trade with the world. <\/li>
    2. Pakistan currently exports , cement,\nfertilisers, fruits, chemicals and leather and allied products to India.\nHowever, a larger look at trade activities between India and Pakistan reveals\nthat import and export between India and Pakistan has been declining since\n2014-15. <\/li>
    3. The major reason for the nominal impact of the\ntrade suspension on India’s businesses and economy is that a large part of the\ntrade between the two countries takes place through the informal route, which\nmeans that the trade takes place through a third country.<\/li>
    4. In the case of two countries, India-UAE-Pakistan\nis the primary channel for informal trading. In this process, trade is recorded\nbetween India and UAE and between Pakistan and UAE, but is not directly\nrecorded between India and Pakistan.<\/li><\/ol>\n\n\n\n

      Given the situation, it is highly unlikely that the trade suspension between the two countries would in any major way impact India and its businesses. Further, India already has revoked the Most Favoured Nation tag given to Pakistan, which snatches away the trade benefits Pakistan used to get. However, it is the local economies that will suffer the most and are already perishing. Alternative sources of livelihood that can be generated to keep border economies afloat should be found with high priority.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Demand of the question Introduction. Contextual Introduction. Body. Impact of face-off on trade. Is it a serious situation? Conclusion. Way forward. The India-Pakistan face-off in the recent period has impacted trade on both sides. In the wake of the Pulwama attack, India withdrew the Most Favoured Nation (MFN) status to Pakistan. The government of India… Continue reading [Answered] Critically analyse the repercussions of India-Pakistan face-off on bilateral trade between both nations.<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-51919","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/51919","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=51919"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/51919\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=51919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}