India-Pakistan war: List of items that may become more expensive in India after Modi govt bans trade with Pakistan
New Delhi: The India-Pakistan relationship is currently at its lowest point. The situation deteriorated after terrorists killed innocent tourists in Jammu and Kashmir’s Pahalgam. In a stern message to Pakistan, India took a slew of steps and snubbed all economic ties, including the limited trade that existed between the two countries. The Indian government recently announced a complete suspension of all trade relations with Pakistan, leading to a total halt in imports and exports between the two nations. Now the question arises: How much will the suspension of trade with Pakistan affect India? What types of goods were traded between the two countries? If exports from Pakistan stop, which items are likely to become more expensive in India?
Trade Declined After the Pulwama Attack
India’s relations with Pakistan have long been strained, and following the Pulwama attack in 2019, India imposed major restrictions on trade with Pakistan. Since then, bilateral trade between the two nations has steadily declined. According to data, in 2018–19, the total trade between the two nations was over Rs 4,370 crore. However, following the Pulwama terrorist attack in 2019, India imposed a 200 percent duty on imports from Pakistan, leading to a sharp decline in trade. By 2019–20, trade through the Attari Land Port had dropped to Rs 2,772 crore.
Pakistan Will Be Affected More Than India
It is important to note that Pakistan is already struggling with its financial condition, with inflation at its peak. Its foreign exchange reserves of the bankrupt country are depleting rapidly, making it heavily dependent on loans from the IMF. In such a scenario, a complete breakdown of trade relations would impact Pakistan more than India. The trade figures between the two countries highlight this disparity. In the financial year 2021–22, India exported goods worth USD 513.82 million to Pakistan, while imports from Pakistan were just USD 2.54 million.
In 2022–23, exports to Pakistan rose to USD 627.10 million, and imports to USD 20.11 million. However, in 2023–24, imports from Pakistan dropped significantly to USD 2.88 million, while India’s exports surged to USD 1,180 million. It’s worth noting that India’s total trade with Pakistan accounts for less than 0.06% of its overall trade. This indicates that India is not significantly dependent on imports from Pakistan, whereas Pakistan is far more reliant on imports from India.
Imports from Pakistan to India: Watermelon, Muskmelon, Cement, rock salt, dry fruits, stones, lime, cotton, steel, optical items for glasses, organic chemicals, metal compounds, leather goods, copper, sulfur, fabrics, slippers, Multani mitti (Fuller’s earth).
Exports from India to Pakistan: Coconuts, fruits, vegetables, tea, spices, sugar, oilseeds, animal feed, dairy products, plastic products, pharmaceuticals, salt, motor parts, dyes, coffee.
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