Pakistan trade report by avoiding Indian goods

According to a study by the New Delhi-based Research and Information System for Developing Countries (RIS), Pakistan suffered a loss of about $7 billion in 2014 by importing items from other countries at a higher cost instead of sourcing them from India.

• The objective of the study is to show Pakistan that they can save on the foreign exchange front if they cooperate in South Asia.

Highlights of the study:

• The study found out that the loss was substantial considering Pakistan’s GDP (nominal, 2015) was only about $270 billion.


• The study covered 5,200 items. These included refined petroleum, palm oil, aviation spirit, motor vehicle parts, edible oil, cotton, milk powder, marine products, machinery as well as chemicals and allied products.
• The study notes that Pakistan incurred huge losses by importing items from the global market at prices higher than the price at which the same product is available from India. Many products that Pakistan imported from third countries were at least three times more costly than the price of the same item from India in export markets, it added.

Background:

Pakistan is a net-importing nation with a trade deficit of $22 billion in 2015. In 2015, it imported around $44 billion, while it exported only items worth $22 billion. India-Pakistan trade is far below potential and negligible.

Trade between India and Pakistan in 2015-16 was just $2.6 billion, while according to various estimates the annual bilateral trade has the potential to surpass $20 billion if both countries cooperate and remove barriers and restrictions. Currently, most of the trade happens indirectly through Dubai, Singapore, port of Bandar Abbas (Iran).