The Indian government is gathering data to assess the extent of indirect exports of Indian goods to Pakistan through third countries. This initiative aims to address the rerouting of shipments to Pakistan, as reported by sources.
In collaboration with industry stakeholders, the government is exploring alternative routes for air shipments due to Pakistan's closure of its airspace to Indian carriers. Goods such as flowers, fruits, and vegetables are typically exported via air routes to regions like the Middle East.
These measures follow the recent terrorist attack in Pahalgam, which resulted in the deaths of 26 people, prompting a swift governmental response.
Export data is being collected from customs, export promotion councils, and other departments. According to the Global Trade Research Initiative (GTRI), Indian goods valued at over USD 10 billion reach Pakistan annually through ports like Dubai, Singapore, and Colombo, circumventing trade restrictions.
GTRI founder Ajay Srivastava stated, "In the bonded warehouse, the labels and documents are modified to show a different country of origin. For example, Indian-made goods may be relabelled as 'Made in UAE'. After this change, they are shipped to countries like Pakistan, where direct trade with India is not allowed."
This practice allows firms to bypass India-Pakistan trade restrictions, sell goods at higher prices, and avoid scrutiny, as the trade appears to originate from other countries. The government is also examining exports to Pakistan via online platforms.
Trade between India and Pakistan has halted after both nations closed land routes. The bilateral trade was minimal following the Pulwama attack in 2019. After the Pahalgam attack, India shut down the Attari land transit post, affecting specific goods. Pakistan retaliated by suspending all trade with India, impacting India's exports to Afghanistan.
In April-January 2024-25, India's exports to Pakistan were USD 447.65 million, while imports were USD 0.42 million. In 2023-24, exports and imports were USD 1.18 billion and USD 2.88 million, respectively. In 2022-23 and 2021-22, exports were USD 627.1 million and USD 513.82 million, with imports at USD 20.11 million and USD 2.54 million, respectively.
Organic chemicals and pharmaceutical products comprised 60% of India's exports to Pakistan in April-January 2024-25, valued at USD 129.55 million and USD 110.06 million, respectively. Other exports included sugar, vegetables, coffee, cereals, petroleum products, fertilizers, plastics, rubber, and auto components. Imports mainly included fruits, oil seeds, medicinal plants, and organic chemicals.
India-Pakistan trade relations deteriorated post-Pulwama attack, leading India to impose a 200% import duty on Pakistani goods and withdraw the MFN status. In 2017-18, Pakistan's exports to India were USD 488.5 million, with fruits and cement as the main imports. The total trade in 2017-18 was USD 2.41 billion, compared to USD 2.27 billion in 2016-17.
Source: Deccan Herald