The heightened military conflict between India and Pakistan after the deadly Pahalgam terror attack that left 26 dead led to closure of borders and airspace between the two countries, thereby cutting off all trade in May.
However, trade via third countries continued, reveals official data that was quoted by Pakistan’s newspaper, Dawn.
While the data of the State Bank of Pakistan (SBP) shows that imports from India reached a three-year high during July-May FY25, Pakistan’s exports to India remained negligible.
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Imports from India totaled USD 211.5 million in the first 11 months of FY25 – surpassing USD 207 million in FY24 and USD 190 million in FY23, the report said.
In the month of May, when the four-day conflict broke out in the first week, imports from India to Pakistan stood at USD 15 million, slightly down from USD 17 million in the same month last year.
However, exports to India were recorded at just USD 1,000 million while total exports during July-May FY25 were only USD 0.5 million.
In FY24 and FY23, exports stood at USD 3.44 million and USD 0.33 million, respectively – highlighting the highly one-sided nature of bilateral trade.
Trade relations between India and Pakistan have been on a downslide since 2019, when the attack in Pulwama in India led to downgrading of diplomatic relations between the two nuclear-armed neighbours.
After India shut down the Attari land-transit post in May this year, cutting off all movement of certain kinds of goods, Pakistan too announced that “all trade with India, including to and from any third country through Pakistan, is suspended forthwith” in retaliation.
Traders were impacted the most, but country loyalties prevented them from airing regrets about trade cut-off.
“It may have come from a third country and the payment for the May imports would have been made before the war,” remarked one trader.
However, despite official data suggesting limited trade, some research institutions suggest actual trade figures could be far more.
“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.
Pakistan’s dependence on foreign inputs for its industry and the high cost of production of goods in the country keeps trade figures looking strong, suggest analysts.
“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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