Trade Potential between India and Pakistan
The potential for trade between India and Pakistan is significant, with both countries standing to gain economically from the reopening of structured trade. Historically, trade discussions and frameworks from 2011-12 still exist and could be revitalized to create a high-impact trade corridor extending through Afghanistan to CIS countries.
Current Trade Scenario
- India officially imported $3 million worth of goods from Pakistan in 2023-24, while its exports to Pakistan reached $1.2 billion.
- Before the 2019 trade embargo, one-fourth (₹4,476 crore) of the total trade took place through the Attari Integrated Checkpost (ICP).
- The reopening of this border could unlock over ₹5,000 crore of annual trade potential.
World Bank Report
- The report titled, "A Glass Half Full: The Promise of Regional Trade in South Asia", indicated that bilateral trade could be 18 times the pre-2019 levels.
- Pakistan’s exports could potentially increase by 80%, offering relief from forex crises.
Strategic and Economic Benefits
- Different agricultural cycles in India and Pakistan can mitigate seasonal shortages, reducing regional food and fuel price volatility.
- A revived trade corridor enhances India's access to Afghanistan and Central Asia, increasing economic influence.
- Indian imports could alleviate food shortages in Pakistan-occupied Kashmir (POK).
Geopolitical Dynamics
- The downturn in Afghan-Pakistani relations has impacted trade, making Indian-Afghan trade crucial.
- Platforms like the Shanghai Cooperation Organisation (SCO) offer neutral grounds for India-Pakistan engagement, fostering informal discussions.
- Both nations could collaborate on areas like climate change, disaster management, public health, and security through SCO’s Regional Anti-Terrorist Structure (RATS).
Economic Cooperation and Infrastructure Projects
- Projects like the Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan-India (IPI) pipelines present mutual benefits.
- Trade acts as a stabilizing force, anchoring peace and creating pro-peace constituencies such as business leaders and traders.
In essence, meaningful trade could act as an icebreaker, requiring a significant leap in political pragmatism to thaw longstanding tensions.