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Despite hostilities and border shutdown, Pakistan-India trade continues via third countries
Despite heightened tensions and a brief military confrontation in May, trade between India and Pakistan continued, largely facilitated through third-country channels, according to official data.
Imports from India reached $211.5 million during the first 11 months of FY25, surpassing the previous fiscal year's total of $207 million and $190 million in FY23, Dawn reported citing figures from the State Bank of Pakistan.
Notably, in May, when a four-day conflict broke out in the first week, Pakistan imported goods worth $15 million from India. This was marginally lower than the $17 million recorded in the same month last year.
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However, Pakistan's exports to India remained negligible. May exports stood at just $1,000, bringing the total for July-May FY25 to only $0.5 million. This continues a trend of highly one-sided trade, with exports amounting to $3.44 million in FY24 and just $0.33 million in FY23.
Formal trade ties between the two neighbours have remained strained since 2019. Following the April 22 Pahalgam terror attack, which killed 26 people, India took swift action, including the suspension of operations at the Attari land transit post — a key route for limited cross-border trade.
In response, Pakistan declared a complete halt to trade with India, including any exchange routed through third countries.
'Traders were reluctant to discuss the continuation of imports during the tense period. However, one trader suggested: 'It may have come from a third country and the payment for the May imports would have been made before the war.'
Although official data reflects limited trade, some research institutions claim the actual trade is far higher. 'India's unofficial exports to Pakistan are estimated at USD 10 billion annually, routed primarily through Dubai, Colombo, and Singapore,' Dawn said quoting a research body.
Analysts said the unofficial trade remains robust due to Pakistan's high cost of production and industrial dependence on foreign inputs. 'We should not ignore smuggling from India since the cost of production in Pakistan is the highest in the region, which creates space for goods from India, China, and Bangladesh,' said an exporter.
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With inputs from agencies
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