Indo-Pak Relations: Through the lens of Trade


by Adarsh Kumar

Many were aghast in 2007 when Dr. Manmohan Singh dreamt of having breakfast in Amritsar, lunch in Lahore and dinner in Kabul. This thought remained a dream until our dynamic Prime Minister Narendra Modi made this come true last week. After signing a plethora of agreement with Russia, Modi inaugurated Indian Government financed Afghani Parliament and gifted three Mi-25 attack helicopters to Afghanistan. During his speech, he said that India is grateful to have a friend like Afghanistan and criticized neighboring countries for supporting terrorism. It was an indirect indication towards Pakistan, but by the time Pakistan Media headed towards this argument Mr. Modi tweeted about his visit to Pakistan and wished a happy birthday to his counterpart Nawaz Sharif, this incidence put South Asia in amazement. Plethora of articles popped up in every newspaper and Indo-Pak media termed this act as breaking news, although a Pakistani news channel questioned, why Narendra Modi and his fleet entered into a sovereign state without a visa. This later became a joke and social media freaks enjoyed it. However, this was big news for both sides because after an Indian PM visited Pakistan for the first time in a decade. Rumors have it that Indian steel magnate; Mr. Sajjan Jindal played a vital role in arranging the meeting between them. If this is true, it can be said that industrialists are seeking opportunities in Indo-Pak trade. Trade embargo between India-Pakistan in between 1965-1974, which created a significant loss to capitalists, can be remunerated. Although Shimla Agreement gave an impetus to trade, India’s trade share with Pakistan was less than a unit and this is very demoralizing for traders. It seems Modi government is also thinking to remunerate this opportunity.

Cynics like Hafiz Saeed said that Pakistan will not tolerate its enemy (Indian PM) on the holy land of Pakistan and advised Mr. Sharif not to put his friendship over national interest. Similarly, a Congress spokesperson said that Modi visited Pakistan because of his personal interest but Congress also agreed that if Indo-Pak relation is strengthened, this will benefit both parties. This can’t be denied that if we put forward security and border issue in coming meetings it will make thing worse, so it is better to focus on trade and commerce because this is a common interest that can generate peace between both nations in the long run. If we look at Indo-Pakistan bilateral trade so far, we’ll find a declining trend (See figure 1). This can be increased if peace talk happens but the experience after Modi’s swearing ceremony is not very supportive. In the past months, NSA level talk was called off by India as Pakistani officials met Kashmiri separatists before the meeting. This decision by India made Pakistan furious and relation for the time being grew from bad to worse.


Modi-Sharif interaction at the sidelines in Paris, National Security Advisor level talk in Bangkok and Smt. Sushma Swaraj’s (MEA) Pakistan visit were all efforts from the Indian side. But in fact, these small steps improved Indo-Pak Relationship and as a result Pakistan has agreed for NSA level talk on 15 Jan 2016.If things go smooth, better trade opportunities can be explored, and India can expect Most Favored Nation (MFN) status from Pakistan. However, this is not a cake walk because; people like Hafiz Saeed always want to cook their food on the fire of Kashmir tension.

Just after independence and Partition, in 1948-49, more than 70 per cent of Pakistan’s trading transactions were with India, 63 per cent of Indian exports to Pakistan. However at the end of 1949 there was fast downtown in Indo-Pak Trade, and after this, we never achieved the same level. Indo-Pak Informal and Illegal trade nearly Count Three Billion USD, which is an enormous amount, thus it becomes paramount to look at these leakages that can benefit both the nations.

Since the Independence, due to Kashmir tension, a lot of money has been wasted, people have been killed, and the unrest in Kashmir has become the reason of hatred towards Indian government among Kashmiris. These problems can be solved if both nations come together and discuss these issues and most importantly, a discussion over trade and commerce will help in solving the matter.

Source: Press Information Bureau, Govt. of India Photo ID: 74977


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