Despite Tensions, India-Pakistan Trade Thrives Through Third Countries
- In May, despite a four-day military conflict and border closures, Pakistan's official imports from India hit a three-year high of USD 211.5 million, reflecting ongoing trade amid tensions.
- Since 2019, formal trade between Pakistan and India has been frozen, yet Pakistani industries remain dependent on Indian raw materials and parts, sustaining unofficial trade channels.
- Official imports reached $211.5 million in July-May FY25, while GTRI estimates unofficial trade via third countries could be $10 billion annually, highlighting persistent large-scale informal flows.
- Despite tensions, Pakistan's industries rely on Indian imports, with high production costs fueling ongoing smuggling and supply pressures, while traders remain reluctant to comment.
- Analysts project that unofficial trade will stay strong due to Pakistan's high production costs and dependence on Indian inputs, despite formal ties remaining frozen since 2019.
12 Articles
12 Articles
India–Pakistan trade persisted in May despite tensions and border closure after Pahalgam attack
Formal trade ties between the two neighbours have remained strained since 2019. Following the April 22 Pahalgam terror attack, which killed 26 people, India took swift action, including the suspension of operations at the Attari land transit post — a key route for limited cross-border trade.
Despite Tensions, India-Pakistan Trade Thrives Through Third Countries
Despite a brief military conflict and border closures, trade between Pakistan and India continued through third countries, reaching a three-year high in imports. Exports to India remained negligible, revealing a one-sided trade relationship. Unofficial trade, primarily through Dubai, Colombo, and Singapore, is reportedly much larger.
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