Pakistan to allow imports from India in sign of diplomatic thaw

Pakistan will allow limited imports of sugar, cotton and wheat from India in a bid to rein in rampant inflation, signalling a further thaw in relations between the two arch-foes.

The government said on Wednesday that permits would be granted for the import of half a million tonnes of sugar — a move expected to slash the price of the commodity by up to 20 per cent ahead of Ramadan, when consumption soars.

Three million tonnes of wheat would also be allowed to be brought in, as well as unspecified quantities of cotton and yarn.

Pakistan’s economy is in the doldrums, a position made worse by a third wave of the Covid-19 pandemic.

Islamabad suspended trade and diplomatic ties with India in 2019 after New Delhi revoked the special status of the part of divided Kashmir that it rules.

Both countries withdrew their top diplomats, and consular staff were expelled or withdrawn.

There has been a frosty stand-off since, but signs of rapprochement recently have included Indian Prime Minister Narendra Modi and his Pakistani counterpart Imran Khan exchanging letters, as well as a resumption of talks last week on the use of resources from their shared Indus River.

Bloomberg reported that the United Arab Emirates had brokered secret back-channel talks between the two nations.

Asked at a press conference on Wednesday why the trade was resuming despite there being no change in New Delhi’s position on Kashmir, Pakistan Finance Minister Hammad Azhar said the government had to make decisions “in the interest of the people”.

“Cutting trade ties with India was an emotional decision and now the resumption of these ties is an economic compulsion,” Farrukh Saleem, an economist and financial and political analyst, said.