Pakistan stops trade with India, know what will be its effect
Pakistan stops trade with India, Pakistan used to export fresh fruits, cement, minerals and ores, prepared leather, processed food, inorganic chemicals, raw cotton, spices, wool, rubber products, alcohol beverages, medical equipment, marine goods, plastics, dyes, and sporting goods to India.
India was stripped of MFN status by Pakistan after Pulwama attack. Imports from Pakistan to India declined by 92 percent to $ 28.4 lakh in March. Imports from Pakistan declined by 47 percent to $ 5.36 million during 2018-19
Furious after the removal of Section 370 from Jammu and Kashmir and reorganization of the state, Pakistan has announced the suspension of bilateral trade with India. Pakistan, which is going through an economic crisis, has taken this decision at a time when its exports to India have come down due to the withdrawal of Most Favored Nation (MFN) status after the Pulwama attack.
Actually trade with India was already in deficit and now this gap had widened considerably. This will cause more loss to Pakistan.
Also read >India vs Pakistan, how is its economic situation
Pakistan used to export fresh fruits, cement, minerals and ores, finished leather, processed food, inorganic chemicals, raw cotton, spices, wool, rubber products, alcohol beverages, medical equipment, marine goods, plastics, dyes, and sporting goods to India. , While the commodities exported from India include organic chemicals, cotton, plastic products, grains, sugar, coffee, tea, iron and steel goods, medicine and copper, etc.
If you take a deep analysis of the India-Pakistan trade, then it is known that the decision of Pakistan will not have a significant impact on both the countries. Trade between India and Pakistan in 2017-18 was just $ 2.4 billion, which is just 0.31% of India’s total trade with the world and 3.2% of Pakistan’s global trade. Indian exports to Pakistan account for about 80 percent of the total bilateral trade.
Looking at the bigger picture, the import-export between India and Pakistan has been declining since 2014-15. The Indian government suspended cross-LoC trade with Pakistan in April 2019 due to the ongoing smuggling of arms, drugs and illicit notes.
‘Pakistan suffers more loss’
after Pakistan stops trade with India, Some experts say that Pakistan’s decision to suspend bilateral trade relations with India will hurt more. He says that the main reason for this is that Pakistan imports many essential goods from its neighboring India. Ajay Sahai, director-general of FIEO, the exporters’ association, said that Pakistan’s suspension of trade relations would have a bad effect on Pakistan itself. Because India is not very much dependent on it in this matter whereas Pakistan’s dependence on India is relatively high.
Rakesh Mohan Joshi, professor at the Indian Institute of Foreign Trade (IIFT), said that Pakistan’s decision would affect his own business. India’s imports from Pakistan declined to $ 284 million in March this year as compared to $ 35 million in March 2018.
During this period, India’s exports to this neighboring country also declined by 32 percent to 17.13 crore on an annual basis. But India’s exports to Pakistan totaled $ 2 billion in fiscal 2018-19, an increase of 7.4 percent. Pakistan has suspended trade relations with India and reduced the level of diplomatic relations in response to India’s move to nullify Article 370 of the Constitution granting special status to Jammu and Kashmir.
India had increased tax after Pulwama
Imports have come down after Pulwama imposed 200 percent customs duty. In the aftermath of the terrorist attack, on February 16, India took strict economic action against Pakistan, raising customs duty on all goods imported from the neighboring country to 200 percent.