Pakistan India Trade

This book explores the unfinished India–Pakistan Trade normalisation agenda (building upon the themes covered in the book “India-Pakistan Trade: Strengthening Economic Relations” published by Springer in 2014) and discusses the steps that must be undertaken in order to move the bilateral engagement forward. Given the commencement of bilateral state-level talks and the Indian government’s emphasis on South Asian integration, it adds impetus to the trade liberalisation process, while also providing essential recommendations for policymakers in both countries. The unfinished agenda faces obstacles such as the list of items for which export from India to Pakistan continues to be restricted; lack of land borders and seamless cross-border transport services, which hampers the realisation of trade potential; negative reporting in the media, which influences traders’ perceptions; and the continued occurrence of informal trade resulting from inadequacies of formal trade relations. The book examines various sectors, including the agricultural, textiles, automotive and pharmaceutical industries, given their predominance on the list of restricted items for bilateral trade. It also covers studies on unconventional and under-researched themes concerning informal trade, informational barriers to India–Pakistan trade, and opening new land borders for trade – all of which can play a facilitating role in realizing the untapped trade potential between India and Pakistan. The book also includes the second round of the India–Pakistan trade perception survey, which identifies impediments to India–Pakistan bilateral trade and assesses the change in traders’ perceptions since the first round of the survey, which was published in 2014.

Examining the implications of recent important developments, the primary aim of this book is to bridge the gaps in existing literature on India-Pakistan economic engagement and to examine various aspects of the trade normalization process. The book includes familiar themes of India-Pakistan bilateral trade in goods and services, providing new insights into the potential for trade and the challenges involved in realizing it. The respective chapters examine the current trade trends and identify the possible sectors for bilateral FDI flows between the two countries, which could help forge deeper economic ties between them. In light of India’s changed investment policy, this analysis is pertinent for investors and policy-makers alike. The book also includes chapters on a variety of unconventional subjects, such as estimating the levels of informal trade, an analysis of a trade perception survey and identifying trade potential using a CGE modeling approach. Further, a number of sectors have been identified for in-depth analysis, including sports goods, healthcare and energy. These sector-based analyses reflect the gap between current levels of trade in the selected industries and the possible trade potential. The studies identify key tradable commodities in the health and sports industries, as well as opportunities for trading in energy. The book thus provides readers with a deep understanding of the process of normalizing economic relations and enhancing bilateral trade at the micro and macro levels, on the basis of which the authors subsequently provide recommendations for policymakers.

This trade perception survey was undertaken to understand how stakeholders engaged in India-Pakistan trade perceived impediments faced by them in realizing the trade potential between the two countries. Based on an analysis of information collected in the survey on six indicators--awareness of trade policy, ease of meeting standards, market access, business facilitation, customs and documentation, and infrastructure at ports--the study recommends policy options that the Indian and Pakistani governments could consider to reduce impediments. As India and Pakistan are in the midst of a trade normalization process, the recommendations made would help the two governments address the impediments highlighted in the study.