In charts: Is Indo-Pak trade too little to matter?
Tensions between India and Pakistan surged following last week's terrorist attack on Indian tourists in Pahalgam, Kashmir, prompting a suspension of trade relations between the two countries. A
Mint
analysis of trade data shows that India remains less dependent on Pakistan, with exports far exceeding imports.
The latest suspension comes against the backdrop of already weakened trade ties. Relations had suffered a major blow after the 2019 Pulwama attack, when India revoked Pakistan's most-favoured-nation status. As a result, India's exports to
Pakistan
collapsed from $2.1 billion in 2018-19 to just $0.8 billion in 2019-20. While exports partially recovered over the following years—reaching a five-year high of $1.2 billion in FY24—driven largely by petroleum and crude products, they have yet to return to pre-2019 levels.
Imports, meanwhile, have fallen even more sharply, with India now importing almost nothing from its neighbour.
Read this |
Mint Primer | Why Pakistan's trade ban is more sound than fury
A closer look at the trade composition reveals that manufactured goods dominate India's exports to Pakistan, accounting for nearly 70% of the total. This includes pharmaceutical supplies, engineering goods, and transport equipment. Agricultural products, led by sugar, processed fruits, and rubber, form the second-largest category, contributing 26.8% of the exports.
The early 2000s marked the high point of India-Pakistan trade, with bilateral commerce growing at a compound annual growth rate of 39% between FY04 and FY09—a period marked by relative political stability. Trade continued to expand until FY14, before declining sharply in the years that followed.
Today, trade volumes are too small to significantly impact either economy. The decision to shut down the Attari border is likely to affect passenger movement more than cargo flows.
Read this |
Mint Explainer: How will Pakistan's NOTAM impact Indian airlines?
Data from the Land Ports Authority of India show that cargo movement through Attari plunged after 2018-19 and has remained low, while passenger traffic—aside from the two pandemic-affected years—has held relatively steady.
Also read |
Mint Explainer: India puts Indus Waters Treaty on ice—what's at stake for both sides
While India-Pakistan trade is likely to come to a complete halt, exports and imports through third countries cannot be ruled out. According to estimates by the Global Trade Research Initiative (GTRI), Indian goods worth over $10 billion reach Pakistan each year indirectly through ports such as Dubai, Singapore, and Colombo, PTI reported
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hans India
19 minutes ago
- Hans India
India's hospitality sector expected to clock 8 pc growth in FY26: Report
India's hospitality sector is expected to post a revenue growth of 6-8 per cent in FY2026 on the high base recorded after three years of double-digit revenue expansion seen by the industry over FY2023 to FY2025, according to an ICRA report released on Monday. ICRA estimates pan-India premium hotel occupancy to hold at 72-74 per cent in FY2026, slightly higher than the 70-72 per cent levels witnessed in FY2024 and FY2025. The average room rates (ARRs) for premium hotels are projected to rise to Rs 8,200-8,500 in FY2026, after a healthy Rs 8,000-8,200 in FY2025 amid lagging supply additions and several hotels undergoing renovation, refurbishment, and upgradation. Jitin Makkar, Senior Vice President ICRA Limited, said: "After three years of strong demand, driven by favourable domestic leisure travel, demand from meetings, incentives, conferences and exhibitions (MICE), including weddings, and business travel, the growth in the Indian hospitality sector is forecast to normalise at 6-8 per cent year-on-year in FY2026." "While the terror attacks in April 2025 and consequent heightened uncertainties in North and West India in May 2025 had led to a surge in cancellation of travel/MICE, the impact has been largely temporary and localised. In recent weeks, there has been a healthy recovery in sentiments following the abatement of the conflict," he added. Foreign tourist arrivals (FTAs) to India are expected to remain muted in the next few months in the aftermath of the terror attacks, but are estimated to witness a gradual recovery thereafter. However, domestic tourism has been the prime demand driver so far and is likely to remain so in the near term, the report states. Factors like improvement in infrastructure and air connectivity, favourable demographics, and anticipated growth in large-scale MICE events, with the opening of multiple new convention centres in the last few years, among others, shall support the growth over the medium term, according to the report. ICRA's sample set, comprising 13 large hotel companies, is likely to report range-bound operating margins of 34-36 per cent for FY2026, despite a lower revenue growth. The margins will remain supported by factors like cost rationalisation measures and asset-light expansions in recent periods. However, within the sample, it is likely to be a mixed bag, depending on renovations and an increase in employee expenses amidst growing demand. De-leveraging of balance sheets has led to lower interest costs and is likely to support net margins, as well as improvement in credit metrics, the report observes. 'The demand uptick over recent years led to an increase in supply announcements and resumption of deferred projects in the past 24-30 months. However, supply growth is expected to lag demand over the next 12-18 months." "ICRA's premium room inventory database (12 key cities) across the country indicates a compound annual growth rate (CAGR) of 4.5-5 per cent in room inventory addition during FY2023-FY2026. A large part of the new supply is through management contracts and operating leases. Land availability issues currently constrain supply addition in the premium micro-markets in metros and larger cities. The addition to premium hotel supply in these areas is largely on account of rebranding or property degradation, and the greenfield projects are largely being initiated in the suburbs," Makkar added.
Mint
22 minutes ago
- Mint
Goyal begins visit to Switzerland and Sweden to deepen trade ties, focus on India-EFTA pact
New Delhi: Amid ongoing negotiations for the Bilateral Trade Agreement (BTA) with the US, commerce and industry minister Piyush Goyal on Monday began a five-day official visit to Switzerland and Sweden, aimed at strengthening India's economic and trade ties with key European partners. The visit, which runs from 9 to 13 June, is expected to advance negotiations on the India-EFTA trade agreement and explore new avenues for investment in sectors such as precision engineering, pharmaceuticals, and sustainable technologies, as per a commerce ministry statement. However, the official release does not mention the inclusion of a business delegation with the minister, despite an earlier announcement by Goyal during his address at the CII Business Summit in New Delhi on 29 May, where he had indicated that a delegation of Indian industry leaders would travel with him to explore partnership opportunities. In Switzerland, Goyal will hold sector-specific meetings with global CEOs and senior officials from industries including life sciences and high-tech manufacturing. He is also scheduled to meet federal councillor Guy Parmelin, Swiss companies, and Indian industry representatives to push forward discussions on the India-EFTA Trade and Economic Partnership Agreement (Tepa), which is seen as a critical pillar of India's strategy to diversify trade partnerships and reduce reliance on traditional markets, the statement said. The minister's itinerary includes participation in the Swissmem Industry Day and a roundtable with the Swiss mechanical and electrical industries—sectors in which Switzerland has deep expertise and where India is seeking greater technology partnerships. The visit comes at a time when India is seeking to push forward stalled trade negotiations with several partners, including those under EFTA, amid a broader geopolitical push to deepen ties with Western democracies and reduce China-dependency in global supply chains. Switzerland, which has a major share of EFTA's total trade with India, is seen as a key player in finalising a balanced and forward-looking Tepa deal. After concluding engagements in Switzerland, Goyal will travel to Sweden, where he will co-chair the 21st session of the Indo-Swedish Joint Commission for Economic, Industrial and Scientific Cooperation (JCEISC) alongside Swedish minister for international development cooperation and foreign trade, Benjamin Dousa, the ministry said in the statement. The commission meeting will serve as a platform to review the current economic cooperation and identify new areas of collaboration, the ministry said. In Sweden, bilateral meetings are also lined up with Håkan Jevrell, state secretary to the minister of development cooperation and foreign trade, as well as CEOs of major Swedish firms, including Volvo Group, Ericsson, IKEA, Sandvik, Alfa Laval, and SAAB, the ministry said. Discussions are likely to focus on green technologies, advanced manufacturing, and innovation—areas where Sweden has global leadership and where India is aiming to accelerate its industrial transition.
Time of India
24 minutes ago
- Time of India
Indian oil & gas sector to witness strong growth despite global volatility
New Delhi: The Indian oil and gas sector is likely to see strong growth through the fiscal year 2026 and 2027, despite significant volatility faced by the oil and gas market last month, said a research note by Systematix Institutional Equities. India's oil & gas sector covered companies are likely to deliver average sales, EBITDA, and PAT growth of 6 per cent, 12.9 per cent, and 13.3 per cent year-on-year for FY26E, and 7.8 per cent, 9 per cent, and 10.1 per cent year-on-year for FY27E, respectively. Systematix suggests that top investment picks include Reliance Industries Ltd (RIL), GAIL India Ltd (GAIL), Mahanagar Gas Ltd (MGL), and Gulf Oil Lubricants India Ltd (GOLI). According to the research, the market suffered from significant volatility with declining crude prices countered by a robust rebound in refining margins. Last month, Brent crude prices fell by 22.9 per cent year-on-year and 3.8 per cent month-on-month in May 2025, influenced by increased OPEC supply from nations like Saudi Arabia and the UAE. Additionally, Global liquid demand also saw a sharp drop before a slight recovery. The lower crude prices contributed to a decline in US rig counts, reflecting cautious upstream investment. Contrary to this, the benchmark Gross Refining Margin (GRM) of companies surged by 85 per cent month-on-month and 121 per cent year-on-year, averaging $6.4/bbl. This significant improvement stemmed from lower crude input costs and enhanced product cracks across gasoline, gasoil, jet, kero, and naphtha segments, all showing strong month-on-month improvements. Furthermore, Natural gas prices presented mixed trends. Henry Hub prices in the US corrected sharply by 31.8 per cent since January 2025 due to oversupply and mild weather. Conversely, Asian spot LNG (Japan Korea Marker) prices rose 6.7 per cent year-on-year to $11.9/mmbtu, driven by regional demand. In the fourth quarter of FY25, the aggregate earnings for the oil and gas sector saw a slight year-on-year decline but a sequential increase, with gas and City Gas Distribution (CGD) companies generally reporting revenues above estimates. While EBITDA/scm for CGD companies declined year-on-year, they showed sequential rebounds driven by price hikes and favourable gas price mix.
