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India - Pakistan Trade

Author

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  • Nisha Taneja

    (Indian Council for Research on International Economic Relations)

Abstract

Quantitative studies estimate that potential two way trade between India and Pakistan can be about 10 times than its rather unsatisfactory current level of $ 613 million. Moving towards realizing this trade potential is clearly in the interest of both countries and the region. In this context this study identifies areas of trade and investment co-operation between the two countries. On the basis of a survey conducted in three cities viz., Delhi, Mumbai and Amritsar the paper examines the characteristics of firms engaged in Indo-Pakistan trade. It also estimates existing transport arrangement between the two countries and the impact of all extant non-tariff barriers. The study suggests that the most important step towards enhancing trade would be to adopt the MFN principle as the current policy inhibits trade, lacks transparency and leads to high transaction costs. The study finds that transportation links between the two countries are inadequate and suggests that new rail and road links should be opened. Transaction costs of trading between India and Pakistan are high and can be lowered by implementing some rather simple policy measures that are spelled out in the paper. The study also examines recent developments in BIMSTEC, ASEAN and in Indo-Sri Lanka and Indo-Nepal trade agreements, and draws lessons to enhance Indo-Pakistan trade.

Suggested Citation

  • Nisha Taneja, 2006. "India - Pakistan Trade," Indian Council for Research on International Economic Relations, New Delhi Working Papers 182, Indian Council for Research on International Economic Relations, New Delhi, India.
    • Handle: RePEc:ind:icrier:182
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    File URL: http://www.icrier.org/pdf/WP182.pdf
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    References listed on IDEAS

    as
    1. Jayatilleke S. Bandara & Wusheng Yu, 2003. "How Desirable is the South Asian Free Trade Area? A Quantitative Economic Assessment," The World Economy, Wiley Blackwell, vol. 26(9), pages 1293-1323, September.
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    Cited by:

    1. Pravakar Sahoo, 2012. "The economic relations of China and India with Pakistan: a comparative analysis," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 19(1), pages 1-35, June.
    2. Nisha Taneja & Isha Dayal & Samridhi Bimal, 2013. "India–Pakistan Trade and Regionalism in South Asia," International Studies, , vol. 50(4), pages 318-342, October.
    3. Mamoon, Dawood & Aslam, Rizwan & Mughal, Hammad & Paracha, Sohail & Ain, Noor ul & Ayesha, Anam & Qudus, Maliha & Saif, Osman Bin, 2010. "Regional trade in south Asia-impediments and the way forward," MPRA Paper 27010, University Library of Munich, Germany.
    4. Zakee SAADAT & Dawood MAMOON, 2016. "Destination EU and USA: Improving Export Potential of Pakistan by Trading with India," Journal of Economics and Political Economy, KSP Journals, vol. 3(4), pages 659-669, December.
    5. Saima Gul & Shaukat & Shaista Gohar, 2018. "Pakistan and India Trade Potential," Global Regional Review, Humanity Only, vol. 3(1), pages 208-221, June.
    6. Jibran Hussain & Ahsan Ali & Muhammad Haseeb, 2017. "Regional Trade Between India and Pakistan: Prospect of Most Favourite Nation (MFN)," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(12), pages 1179-1196, December.
    7. Thiyam Bharat Singh, 2007. "India's Border Trade with Its Neighbouring Countries with Special Reference to Myanmar," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 1(4), pages 359-382, December.
    8. Nisha Taneja & Samridhi Bimal & Isha Dayal, 2016. "India’s Informal Trade with Pakistan," Working Papers id:11076, eSocialSciences.
    9. Díaz-Bonilla, Carolina, 2007. "Poverty and Income Distribution Under Different Factor Market Assumptions: A Macro-Micro Model," Conference papers 331625, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Pohit, Sanjib, 2013. "India-Pakistan Trade Liberalization: A CGE Modelling Apporach," MPRA Paper 45878, University Library of Munich, Germany.
    11. Meenu Tewari, 2008. "Deepening Intraregional Trade and Investment in South Asia - The Case of the Textiles and Clothing Industry," Trade Working Papers 22265, East Asian Bureau of Economic Research.

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    More about this item

    Keywords

    South Asia; India-Pakistan trade; commercial policy; MFN;
    All these keywords.

    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L8 - Industrial Organization - - Industry Studies: Services
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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