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India has slammed the trade door on Pakistan following the recent Pahalgam terror attack, but the Global Trade Research Initiative (GTRI) says demand doesn’t vanish with diplomacy. While formal trade takes a hit, Pakistan is expected to sneak in Indian goods through third-country detours—think UAE and Singapore—with a fatter price tag. This isn’t their first fallout; post-Pulwama in 2019, India yanked Pakistan’s Most Favoured Nation status and slapped a 200% import duty. GTRI sums it up best: “In short, border closures halt formal trade—but not demand.” Looks like trade finds a way, even if it takes the scenic route.
Formal Trade Suspension Since 2019
After the Pulwama attack, Pakistan suspended all bilateral trade with India in August 2019, effectively freezing formal trade between the two nations. Since then, trade has remained largely inactive, with India only allowing limited exports on humanitarian grounds—mainly medicines. Despite the formal freeze, India exported goods worth USD 447.7 million to Pakistan between April 2024 and January 2025, as per official data. These exports included essential items such as pharmaceuticals, active pharmaceutical ingredients, sugar, auto parts, and fertilisers. While the official trade channels stayed restricted, this data shows that some economic exchanges quietly continued amid strained ties.
India’s Export Data to Pakistan
India’s major exports to Pakistan included pharmaceuticals valued at over USD 110.1 million, active pharmaceutical ingredients (APIs) worth USD 129.6 million, and sugar amounting to USD 85.2 million. Additionally, auto parts worth USD 12.8 million and fertilisers worth USD 6 million also reached Pakistan during this period.
Negligible Imports From Pakistan
India’s imports from Pakistan remained minimal during the current fiscal year, amounting to just USD 0.42 million, according to official data. The limited trade primarily consisted of niche agricultural items not widely produced in India. Among these were figs worth USD 78,000, along with herbs such as basil and rosemary, valued at USD 18,856. These specialised goods continued to trickle in despite the formal trade freeze, reflecting limited but persistent demand for unique products. While symbolic in volume, these imports highlight that certain cross-border exchanges still find their way through, even when broader economic ties are under strain.
Third-Country Trade Channels Expected to Rise
With formal trade now entirely closed, Pakistan is expected to continue importing Indian goods through informal and third-country routes. GTRI estimates around USD 10 billion worth of trade still occurs via re-export channels, mainly through the United Arab Emirates and Singapore. Goods like pharmaceuticals, chemicals, cotton, tea, coffee, dyes, onions, tomatoes, iron, steel, sugar, salt, and auto parts reach Pakistan through these hubs.
Indian Imports Via Indirect Routes
India may continue receiving Himalayan pink salt and dry fruits such as dates, apricots, and almonds from Pakistan through similar third-country routes. GTRI stated, “In short, border closures halt formal trade—but not demand. Pakistan will continue sourcing Indian goods, just at a higher cost and through third countries.”
(With Inputs From ANI)
