After the recent terror attack in Pahalgam, India has decided to stop all trade with Pakistan. This has made tensions between the two countries worse. India has also closed the Attari-Wagah border, which is the main route for trade. This decision will stop trade worth Rs 3,886.53 crore between the two countries.

The Global Trade Research Initiative (GTRI) says that India and Pakistan do not directly trade much with each other. However, India still sends goods worth $10 billion to Pakistan every year, but these goods go through other countries first before reaching Pakistan.

Trade between India and Pakistan before the attack

The Attari border in Amritsar is where most trade between India and Pakistan takes place. After India decided to stop trade, Pakistan also stopped trading with India. In 2024, the trade between the two countries grew by 127 cents, reaching $1.2 billion, which is much higher than in 2023, when it was just $0.53 billion.

Before the Pulwama terror attack in 2019, India and Pakistan traded goods worth about $3 billion. India mainly sends medicines, sugar, tea, coffee, cotton, iron, steel, tomatoes, salt, car parts, and fertilisers to Pakistan. Pakistan exports spices, dates, almonds, figs, basil, and rosemary herbs to India.

Since trade has stopped, Pakistan will likely buy these goods from other countries like the UAE, Singapore, and Sri Lanka instead of directly from India.

Impact on prices in Pakistan

Since the trade between India and Pakistan has stopped, Pakistan will have to buy goods from other countries, which will make transportation costs higher. This means that products from India will become more expensive in Pakistan. The price increase will mainly affect the poor people in Pakistan. Experts also warn that Pakistan's medicine industry might struggle because of the trade stoppage. On the other hand, India doesn't rely much on Pakistan for its imports, so it will not be as affected by this change.

 

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