Pakistan’s foreign minister Ishaq Dar on March 23 said that his country was considering renewing trade ties with India.
The answer lies in the simple fact that trade with Pakistan from the Indian side still continues through third parties, i.e Dubai, Singapore and other ports. In the current year itself, India has exported nearly $1.10 billion worth of goods that including petroleum products, sugar and pharmaceuticals to Pakistan. The imports from Pakistan are negligible.
Why India – Pakistan Trade Went Downgrade?
Pakistan decided to downgrade ties with India and cut all trade ties after New Delhi abrogated Article 370 and Article 35(A) on Jammu and Kashmir. India removed the ‘Most Favoured Nation’ status granted to Pakistan after Pak-based terrorist group Jaish-e-Mohammed struck in Pulwama on February 14, 2019, killing 40 Central Reserve Police Force (CRPF) personnel in a suicide bomb attack.
Two years ago, Pak lifted the sanction on the import of life-saving drugs from India. Currently, that is the only direct trade that takes place and that too because India believes in humanitarian assistance to any neighborhood country.
Why is Pakistan Wanting To Do Trade With India?
- There is a lot of pressure from the Pakistani business community to do trade as they are paying extra duties while getting imports from India via third countries.
- Its domestic debt has increased sixfold in nominal terms since 2011. For the financial year 2024, Pakistan faces an estimated debt maturity of $49.5 billion with 30 percent as interest payments.
- Under the circumstances, there is no better way for Pakistan to cut down its losses and then tell the world that it has come down from its high horse and is willing to resume trade ties with India.
- Till such time, the Pakistan Army which runs the country, comes out clearly whether it wants to have trade ties with India or not, all this is a matter of public speculation.
What Should India Do Now?
When Pakistan says it wants to resume ties with India while wanting the J&K issue to be settled, this line does not hold good for New Delhi. India wants bilateral ties with Pakistan only after terrorism issue is settled and Islamabad takes action against anti-India terror groups like Jaish-e-Mohammad and Lashkar-e-Toiba that are based in the neighbouring country.