NEW DELHI: Pakistan’s move to ban all trade with India as part of a raft of measures against India bifurcating Jammu and Kashmir, is expected to push trade that used to be done directly through the Wagah border to global trading hubs Dubai and Singapore .
Trade through third countries — usually Dubai in the UAE and Singapore — is currently estimated to be worth about USD 5-10 billion. This is expected to go up once the formal trade ban is effected.
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Despite tension between the two nations, total trade between the neighbours had risen by 6.1 per cent in 2018-19 to USD 2.56 billion, with India selling USD 2.07 billion worth of goods to its neighbour and Pakistan selling about USD 495 million worth of goods to India.
“The trade ban will have a marginal impact partly as trade would be pushed through Dubai and partly as the volume of trade is very low. However, border trade through Wagah in farm commodities such as tomatoes and onions will be left out in the cold as they cannot be transported through third countries,” said Prof Biswajit Dhar of JNU.
The major exports sent from India to Pakistan include raw cotton, cotton yarn, chemicals, plastics, manmade yarn and dyes. While India mostly imports fresh fruits, cement, petroleum products, bulk minerals and ores and finished leather from its western neighbour.
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Pakistan maintains a negative list of 1,209 products that cannot be imported from India. It also imposes high tariff on those goods and services that are allowed entry. Banned goods from India include textiles, garments, pharmaceuticals, plastic and polymer, cars, trucks and auto parts.
India too had withdrawn most favoured nation status to Pakistan earlier this year after the Pulwama attack and had slapped higher duty on Pakistan, making direct trade difficult.