India-Pakistan Trade Surges Despite Tensions

Unexpected Boom: India’s Exports to Pakistan Reach 5-Year High

Despite ongoing tensions between the two countries, India’s exports to Pakistan have hit a five-year high in 2024, reaching a whopping $1.21 billion. This is a significant jump from $530.91 million in 2023, showing a remarkable 127.21% increase.

The last time Indian exports to Pakistan were this high was back in 2018, when they reached $2.35 billion. Now, while this recent figure is still lower than 2018, it’s a clear indication that trade between the two nations is picking up.

India’s top exports to Pakistan include things like organic chemicals, medicines, sugar, and sweets. In return, Pakistan sends apparel, salt, sulphur, lime, and cement to India.

This surge in trade comes despite a history of political friction. Remember the Pulwama Attack in 2019? India responded by significantly increasing customs duties on goods imported from Pakistan, and even withdrew its Most Favoured Nation status. This really hurt Pakistan’s exports to India, which plummeted from $547.47 million in 2019 to just $0.48 million in 2024.

Pakistan also responded by suspending bilateral trade with India after the abrogation of Article 370, which gave special status to Jammu and Kashmir. However, they quickly changed their minds on some items due to concerns about inflation.

It’s interesting to note that even with all this tension, India’s exports to Pakistan have jumped over 300% since 2020.

With the recent Pahalgam attack, it’s uncertain how this trade relationship will evolve. Will the recent attack lead to a reversal of this positive trend? Only time will tell.