Islamabad – Political and military tension between Pakistan AndIndia Its shadows on the trade relations between them, as it became one of the areas of tension between the two countries, especially after August 2019, after India canceled Article 370 of the Indian constitution, and requires granting a special case from the autonomy of Jammu region Kashmir The disputed with Pakistan.
Since that date, the official trade between Pakistan and India has stopped, and it remained hanging until the last tension between the two countries, which actually began on April 22 after the Baghamel attack in the Indian part of Kashmir, where India accused Pakistan of involvement in it, which the latter denied.
In a press statement in March of last year, the Pakistani Foreign Ministry said that trade with the Indian side is officially suspended, and that there is no change in Pakistan’s position on this.
A gradual development and then interruption
Relations between Pakistan and India pass through stages of ascension and landing, and this is a shadow over the volume of trade exchanges between the two countries. Relations between the two countries were strained after the Cargill War in 1999, and this implemented a significant impact on trade between the two countries, and then relations gradually returned after an agreement cease-fire In 2003, the volume of trade between the two countries witnessed a remarkable development that continued until 2019.
According to the Indian UNHCR data in Islamabad, the total trade in the 2003-2004 fiscal year reached 344.68 million dollars, an increase of 79.87% over the previous year.
According to the same data, which monitors the sequence of trade volume between the two countries for all years from 2003-2004 until 2018-2019, where the total volume of trade amounted to 2561.44 million dollars.
After the Indian procedure in 2019, the official trade between the two countries was interrupted, which means that there is no official trade exchange between them, but some private trade exchanges remained continuous, but in very small proportions compared to previous years.
According to the data of the Pakistani Business Council, the year 2018 is the last year to witness trade exchanges between the two countries naturally, despite some restrictions, as the volume of trade decreased a sharp decrease in 2019, and according to the council data, in 2018, the value of India’s imports from Pakistan amounted to 549.3 million dollars, and India’s exports to Pakistan amounted to $ 2.35 billion. In 2019, Pakistani exports amounted to $ 67.3 million, while imports from India amounted to $ 1.2 billion.
It continued to decline until it reached 2022, to $ 20 million, the volume of Pakistani exports to India, compared to 629.5 million dollars in the volume of imports from India.
In the developments of the scene during the recent tension, the Pakistani Ministry of Trade issued on May 4, an official notice in which it said that it “prohibits imports of goods of Indian or imported from India from third countries across the sea, land and air, passing through Pakistan, or exports of other countries to India across the sea, land and air, through Pakistan.”
Geopolitical tensions
Trade has been seen as one of the areas that can reduce tensions between the two countries, and it is ongoing tensions since the establishment of Pakistan in 1947.
In this context, the researcher specializing in economic affairs at the Institute of Strategic Studies in Islamabad Ahmed Salik, that the trade, which was a bridge between the two countries, was overwhelmed by the outstanding political conflicts, especially regarding Kashmir. Every diplomatic or military opposition confrontation, whether it was the Polo-Palquot crisis in 2019 or the latest escalation after Baham, brought with it an economic separation, including the suspension of bilateral trade.
Salik added in an interview with Al -Jazeera Net, that the most frustrating thing is the political decisions that are sometimes taken as a reaction to internal pressure, and had long -term economic consequences.
Salik continues his speech, “With the closure of the borders and the stopping of trade routes, informal trade and smuggling flourished, and legitimate business has suffered on both sides.”
For his part, the economist, witness Mahmoud, says that the main reason for the decline in mutual trade between Pakistan and India is the geopolitical differences between the two countries, and India was intransigent in commercial dealing with Pakistan.
Mahmoud’s witness to Al -Jazeera Net adds that India is, in one side and suddenly, many agreements between the two countries, both in the sports or commercial field. This raises uncertainty about bilateral trade between the two countries.
He continued, “India’s large trade with other countries enables it to overcome trade with Pakistan without consequences that are mentioned in its economy or business.”
Mahmoud sets an example of mutual trade between India and China, as it says that it is interesting China Absent from this type of selective deal on the part of India, where several skirmishes with India – including skirmishes that caused loss of life – and despite these losses, the trade between China and India continued to increase. This shows India’s selective approach.
The future is risky
In light of the current situation, mutual trade between the two parties seems vague, especially in light of India’s suspension of the Sind River water agreement, Pakistan closing its air field in front of Indian aviation, and the closure of India some common crossings between the two countries.
Ahmed Salik says that, given the current situation, especially after the recent military escalation at the beginning of last month, the future of trade between Pakistan and India is still risky. There is a freezing of diplomatic relations, with a great limitations of communication channels.
Salik believes that in this climate, even the idea of normalizing trade seems to be a political, unwanted and popular. Since confidence is fragile, and with the elections and national speeches that are often constantly formed by nationalism, any move towards economic association is risked to be imposed as satisfying.
However, Ahmed Salik believes that the prospects for trade between Pakistan and India should not be excluded completely as there is a room for cautious optimism, especially if trade is seen not only as an economic activity, but as a possible tool for peace and regional stability.
He adds, to move forward, both sides need to separate trade from graduate policies to some extent, starting with measures to build small confidence in specific sectors, such as the resumption of agricultural or medical trade limited.
It is believed that the second track diplomacy (Track II Diplomacy) and interactions between companies can help rebuild confidence gradually. In the long run, regional integration – through platforms such as the South Asian Association for Regional Cooperation or even informal economic corridors – must be re -visited as a common goal.
For his part, Mahmoud Shahid believes that the horizons are very dark, given the recent skirmishes and the increasing possibility of more skirmishes in the future.
He believes that the only way to improve is to reach an agreement between the two countries, which guarantees a long -term commitment to resolve issues through dialogue.