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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.
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Dawn broke the news in Pakistan on Saturday, July 5, 2025.
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