Trade between India and Pakistan may dip by 20% in 2012-13due to the current disturbances on the borders and also within the Pakistan,according to the Associated Chambers of Commerce and Industry of India(ASSOCHAM).
The chamber analysis says the bilateral trade between thetwo countries during the first half of the year was $ 1.1 billion and mayfurther dip by 20% during the year 2012-13. The on-going atmosphere will haveits own repercussions and will be reflected on cross-border trade. Also, Indianbusinessmen and small merchants who were contemplating trade relations withPakistan have put their plans on hold, reveals the ASSOCHAM paper.
In an analysis on `Indo-Pak trade & Its Impact onIndia’, the ASSOCHAM Secretary General,D. S Rawat said that the current disturbances on the borders in Pakistan hasbeen observed to have had an effect on India’s cross-border trade and Indianbusinessmen and small merchants, who were contemplating to set up traderelations with it have now held up their plans.
According to estimates, bilateral trade in 2011-12 betweenthe two countries had recorded a decrease of 14% and stood at US$ 1.9 billion.India’s export to Pakistan in the same period was US$ 1.5 billion which shows adecrease of 25% against US$ 2.0 billion in the fiscal 2010-11. Imports fromPakistan during the same period were worth US$ 0.4 billion, an 48% increaseover the 2010-11 of US$ 0.27 billion.
ASSOCHAM has said that sectors which may get affected aresuch as food processing, IT, sports goods and textiles that can witness inflowof investments from both the countries.
ASSOCHAM apprehends that it would not only affectIndia-Pakistan trade but the entire intra-trade SAARC trade would be affectedsince most of the countries in the region are inter-dependent in various items.
Rawat further said, “If things are not handleddiplomatically, it may result to serious disruption of trade in Pakistanparticularly and SAARC in general and may also accelerate into regionaluncertainty.”
Pakistan supplied chickpeas, pulses, grains and sugar whenthese were short of supply in India and on the other hand, India suppliedonions, potatoes, pulses and other food items, adds Rawat.
ASSOCHAM believes that the route towards better relationsbetween India and Pakistan has increased the trade in the last few years. Not only are there large trade relatedadvantages to governments and consumers in both countries but entire SouthAsian region gains from the harmony of two countries with increased trade andcommerce.
The study further reveals that Pakistan can be greatlybenefited from the import of agricultural produce like wheat, spices, tea andother edibles to meet production shortfalls at competitive prices.
