Pakistan-India trade volume falls 51pc in Q1

Trade between Pakistan and India sharply fell 51 percent to $230.6 million in the first quarter of the current fiscal year, the central bank's data revealed, as tariff and non-tariff restrictions continued to take a toll on their bilateral economic relations.

Bilateral trade volume stood at $467.4 million in the corresponding period a year earlier, the State Bank of Pakistan's (SBP) data showed.

In July-September, exports to India sharply dropped to $9.8 million from $102.458 million in the corresponding period a year earlier. Imports from India, during the three months period, also dipped to $220.8 million compared with $364.9 million a year earlier.

Tariff and non-tariff barriers hold back trade potential between the two countries, which account for 88 percent of South Asia's gross domestic product. Removal of trade barriers could trigger flood of new jobs and lead to prosperity across the region, the World Bank said in a report.

In September, Pakistani exporters could fetch only $1.8 million in a sharp contrast to $25.6 million in the corresponding month a year earlier and $2.5 million in August.

Imports from India were also down to $29.5 million in September 2019 as opposed to $101.8 million in September 2018 and $69.1 million in August 2019.

Pakistan Business Council said India has grown to become the sixth largest economy in the world with a total trade of more than $600 billion. "However, Pakistan's trade with India is very limited, despite having potential, due to political rivalry," the business policy advocacy group said in a report.

The World Bank said the two countries have a potential to lift the annual bilateral trade volume up to as high as $37 billion by "reducing policy barriers, such as eliminating the restrictions on trade at the Wagah-Attari border, or aiming for seamless, electronic data interchange at border crossings," the bank said in the report last year.

Trade balance has been in favour of India despite constant decline in bilateral trade.

Pakistan imported $1.6 billion worth of products during the last fiscal year of 2018/19 compared to $1.8 billion in the fiscal year of 2017/18. Exports to India amounted to $312 million during the last fiscal year as opposed to $419.8 million a year earlier.

The government is struggling to boost exports to support the current account which is limping through the deficit zone on regulatory and administrative measures to trim imports and foreign debt inflows.

Export sector is still struggling to improve the external sector. Exports edged down one percent to $22.9 billion during the last fiscal year. There was a little improvement in exports in the first quarter with around three percent growth in exports.