There are updates to this page that haven't been applied because you've entered text. Refresh this page to see updates.
Hide this message.

How mutually important are economic ties between India and Pakistan?

If you have specific numbers on the volume of trade, amount of direct investments between the two, magnitude of travel between the countries, and so on, please *do* include them.

Wikipedia says nothing of interest on this topic and I'm curious to know.

In the media in the US, at least, all of the discussion is about the antagonism that characterizes this relationship. But I'd want to know what the two nations think of each other when--to put it somewhat crudely and for lack of a better phrase--it is a matter of putting their money where their mouth is.

Answers both from Pakistanis and Indians much appreciated; as is input from people who know about international trade policy in general.
Quora UserQuora User, Shuffling Around
4 upvotes by Adhikarla Avinash, Quora User, Vincen Mathai, (more)
I'll only talk about the people side of the equation. I do not have data at hand right now.
No matter how much Indians and Pakistanis, civilians or governments, pose they can do well without the other, in reality geography, culture, shared interests, business, are all interlinked—so much that there is little doubt that their development would speed up, if only they started trading with each other.


The unofficial trade is cited at over a billion dollars. By unofficial, I mean trade carried on through smuggling because the governments don’t allow it. That shows the willingness between businesses to start working with the other. There are real problems to be resolved. Even though the governments on both sides have taken steps but I guess they are too little. Decades of media and real warfare have inculcated suspicions on both sides.


Here's a small nugget: I wanted to export some equipment to India a couple of years ago. But the buyer in India was reluctant to send the money via banks or receive the goods from Pakistan due to a fear that
a) banks wouldn't help him out.
B) He would be tracked by Indian intelligence for his economic dealings in Pakistan.
In the end he wanted me to send the goods through Dubai. But the freight cost didn’t allow it and we cancelled the whole matter. Too cumbersome.


Was his fear misplaced? I can’t comment. There is a kernel of truth, especially for businesses that do not regularly do business with each other, at least in the sense that bank dealings are more problematic.
A good thing is that I am nowadays being contacted by a lot of Indian companies that want to trade with Pakistan. This wasn’t the case say ten years ago, when even the idea wasn't entertained. Pakistani textiles, I hear, are doing well in India.


Just remembered: About 12 or 13 years ago I had an opportunity to sell Indian pharmaceutical raw materials in Pakistan as an exclusive representative for a large Indian pharma company. The response I got was not encouraging from the manufacturers in Pakistan, particularly middle management refused to entertain the notion of Indian goods.
Good to report that businesses are now dealing with each other, and customers are not wary of buying the other countries products like they used to.


Currently there is a lot of barter trade going on between the countries, particularly for agricultural goods. But traders routinely suffer losses when either government decides to block trade like India did last year on the banana trade. That results in loaded trucks rotting at the border custom posts. The trade then goes on through Dubai, which leads to a higher cost, and the attraction of buying from the other reduces, with the middlemen in Dubai pocketing the fat.
As to investment, there is none to speak off. This has to do with government policies on both sides.

The anti-India rhetoric has considerably lessened in Pakistan over the last decade or so. Not gone, but better. But we do have the jingoistic cheer leaders preaching hate.
The news I hear from India is always about the BJP, Shiv Sena, or other Nationalistic groups raising noise over Pakistani sports teams or artists flying in, stopping scheduled matches—like they did a few months ago in Mumbai, where the cricket match was cancelled. This adds fuel to the fire of the hate mongers.

Trade—that’s what I see as the essential pin-down feature for starting a peace process. Without people meeting and finding out what the other side thinks of them there’s no hope. I don’t trust the media anymore, with their selected highlights of events—almost always, negative. That’s what sells.
It’s time to get the older generation out, they are the ones I partially blame for the mess, and especially because they refuse to change. My hopes are on the young folks of both sides.
Write an answer