Trade with India has always been a bumpy road. But in an era of geo-economics, it is increasingly unavoidable. Apart from inherent political discords, what has hampered bilateral trade is a regime of protectionism. Respective governments have been very conscious of their local industries, and competition in a laissez faire mode was shunned for obvious reasons and isolationism was preferred. Though formal trade has always been negligible, what has made them logical trading partners is geography, diversity of products and an instant accessibility. This is why illegal trade via smuggling and rerouting of goods via foreign destinations has for decades been the modus operandi. The only exception was when they formally traded under a restrictive bilateral trade regime, known as the Most Favored Nation (MFN) status.
The Adviser to the PM on Commerce and Investment, Abdul Razak Dawood once again spinned the ball as he advocated trade with India. The position of some of the cabinet ministers has vocally been in favour of trading with New Delhi, and last year even a decision was made at the executive level to go ahead with it. It is another story that impediments set in and the momentum fizzled out. By calling trade with India the “need of the hour and beneficial to both countries”, the economic wizard has set the ball rolling. He and his likes have a proven synopsis to narrate while endorsing interaction across the borders.
Pakistan’s exports to New Delhi have plunged by 90.4 per cent in 2021, following the suspension of trade ties with India in 2019. The State Bank of Pakistan says exports dipped to $0.099 million from $1.035 million. India with a billion plus population and GDP 10 times larger than Pakistan will be a lucrative market. India conventionally has had a trade surplus. Yet, Pakistan’s diversity in textile, agrarian produce and even finished goods can stand the litmus test of competition. While trade is road-based and luckily the infrastructure exists too, it will be a bonanza of sorts to realise the Chinese BRI dream of connectivity. Islamabad’s largesse to geo-economics can swing the pendulum of economic proactivity, and at the same time engage Delhi in an apt manner.
Published in The Express Tribune, February 23rd, 2022.
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