{"id":107929,"date":"2021-05-21T10:24:40","date_gmt":"2021-05-21T04:54:40","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=107929"},"modified":"2021-05-26T13:08:31","modified_gmt":"2021-05-26T07:38:31","slug":"future-of-india-pakistan-trade-relations","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/future-of-india-pakistan-trade-relations\/","title":{"rendered":"Future of India &#8211; Pakistan Trade Relations"},"content":{"rendered":"\n<h5><b>Synopsis<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<p><span style=\"font-weight: 400;\">The Economic Coordination Committee (ECC) of Pakistan put forward a proposal to import sugar, cotton, and cotton yarn from India. Although the proposal was rejected by Pakistan\u2019s government, it is definitely an indication of improving the future course of <a href=\"https:\/\/forumias.com\/blog\/suggestions-to-improve-india-pakistan-relations\/\" target=\"_blank\" rel=\"noopener\">India-Pakistan trade relations<\/a>.<\/span><\/p>\n<h5><b>Background<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The two countries are undergoing restrictive trade since 2019. The Pulwama Terror attack in Kashmir and cross-border airstrikes in 2019 induced India to impose trade restrictions. It withdrew the Most Favoured Nation (MFN) status of Pakistan and imposed a customs duty hike of 200% on imports.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Similarly, Pakistan imposed a complete ban on trade when India revoked the special status of Jammu and Kashmir.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Pakistani ECC\u2019s recent proposal of importing Indian goods shows a softness in attitude. Thus, it would help in improving the future course of trade relations.\u00a0<\/span><\/li>\n<\/ul>\n<h5><b>Factors indicating future improvement in India-Pakistan Trade Relations<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><b>First<\/b><span style=\"font-weight: 400;\">, the <\/span><b>past precedent<\/b><span style=\"font-weight: 400;\"> shows that trade restrictions are lifted after some time for mutual benefit.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">For instance, the protocol on resumption of trade was invoked in 1974 after a suspension of nine years due to the 1965 war. The trade was started for essential items like agricultural commodities and expanded over the years.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><b>Second<\/b><span style=\"font-weight: 400;\">, Pakistan <\/span><b>deviated from the complete ban within a month of suspension<\/b><span style=\"font-weight: 400;\">. It lifted the ban on the import of medicines and raw materials from India. The aim was to avert any crises and ensure that there is no shortage of essential drugs.<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Similarly, now its own Economic Coordination Committee (ECC) is suggesting to import sugar, cotton, and cotton yarn from India.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><b>Third<\/b><span style=\"font-weight: 400;\">, Indian trade data shows that despite a ban from Pakistan&#8217;s side, <\/span><b>the trade has been ongoing.<\/b><span style=\"font-weight: 400;\"> During 2020-21 (April-February), the recorded bilateral trade was $280 million. Out of this, India exported goods worth $278 million and imported goods worth $2 million.<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The biggest component of export (77%) were vaccines and pharmaceutical products. After this, the second position was occupied by sugar at 15%.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><b>Fourth<\/b><span style=\"font-weight: 400;\">, there exists <\/span><b>a significant cost of refraining from the trade<\/b><span style=\"font-weight: 400;\">. A healthy trade allows both countries to stabilize domestic prices and take care of seasonal shortages in the home country.<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Further, a severe restriction allows<\/span><b> the trader to shift to informal channels <\/b><span style=\"font-weight: 400;\">of trade that reduce the potential tax revenue of the government.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h5><b>Way Forward<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The countries should cooperate on creating a positive list for trade as the first step towards normalisation.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Business organisations on both sides can create a strong lobby. This could be used to build momentum in opening channels and influence the shaping of the India-Pakistan trade policy.<\/span><\/li>\n<\/ul>\n<p><b>Source<\/b><span style=\"font-weight: 400;\">:<a href=\"https:\/\/epaper.thehindu.com\/Home\/ShareArticle?OrgId=G258JIOII.1&amp;imageview=0\" target=\"_blank\" rel=\"noopener\">The Hindu<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Synopsis: The Economic Coordination Committee (ECC) of Pakistan put forward a proposal to import sugar, cotton, and cotton yarn from India. Although the proposal was rejected by Pakistan\u2019s government, it is definitely an indication of improving the future course of India-Pakistan trade relations. Background: The two countries are undergoing restrictive trade since 2019. The Pulwama&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/future-of-india-pakistan-trade-relations\/\">Continue reading <span class=\"screen-reader-text\">Future of India &#8211; Pakistan Trade Relations<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,1351,1310,9],"tags":[1474,1457],"class_list":["post-107929","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-daily-news","category-daily-news-updates","category-public","tag-foreign_policy_india","tag-ir_02","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704822102},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/107929","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"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=107929"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/107929\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=107929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=107929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=107929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}