New Delhi: A day after Pakistan expressed its willingness to resume bilateral trade with India, which was suspended by the former Imran Khan government in August 2019, New Delhi has made it clear that it will not take such a step in terms of “normalisation of trade”. However, India is ready to extend humanitarian aid and assistance for the flood-hit areas of the neighbouring country, “based on the kind of request” that comes from Islamabad.
Resumption of two-way trade between India and Pakistan will “not happen” any time soon and certainly not before both decide to have normal diplomatic ties with the reinstatement of envoys in each country, official sources told ThePrint.
Sources also said that just as the Narendra Modi government had stepped up cooperation during the peak of the Covid pandemic even as it hosted a virtual meeting of the South Asian Association for Regional Cooperation (SAARC), it is willing to help Pakistan which is facing a humongous crisis owing to flash floods.
The unprecedented flash floods have ravaged several parts of Pakistan, killing thousands and causing damage to the tune of $10 billion.
India has said it is “open” to sending vegetables and other food items, as well as medicines and essential items to Pakistan, on a “case-to-case” basis depending on the “kind of request” that gets communicated from Islamabad to New Delhi, sources said.
As of now, no official request has been made by Pakistan to India to send food shipments there.
On Tuesday, Pakistan’s finance minister Miftah Ismail said that the Shehbaz Sharif government can “consider importing vegetables and other edible items from India” in the wake of the crisis situation there.
Following that, Prime Minister Narendra Modi expressed his sympathies to Pakistan and extended his condolences in a tweet.
Saddened to see the devastation caused by the floods in Pakistan. We extend our heartfelt condolences to the families of the victims, the injured and all those affected by this natural calamity and hope for an early restoration of normalcy.
— Narendra Modi (@narendramodi) August 29, 2022
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Resumption of trade will have to be from Pakistan’s side
Sources also indicated that since it was Pakistan that had stopped trade with India, the decision to resume it will also have to happen from their side. The decision will have to be formally proposed to India, post which the government will take a call on whether or not to resume it.
The issue had been discussed earlier too, when back-channel talks between India and Pakistan gained momentum for a brief period in February 2021, post the joint statement issued by the directors general of military operations (DGMOs) of both countries on maintaining ceasefire along the Line of Control (LoC).
In August 2019 post the abrogation of Article 370 in Jammu and Kashmir, the then Imran Khan-government had suspended trade with India, which happened via the Attari-Wagah border, and also downgraded diplomatic ties between the two countries.
Prior to that, in February 2019, India had stripped Pakistan of the Most Favoured Nation (MFN) trade status due to the Pulwama attack.
Granting MFN status to each other will be tantamount to normalisation of trade between the two countries.
However, even after the suspension of trade by the Imran Khan government, India has continued to send pharmaceuticals, sugar and organic chemicals to Pakistan, post the issuance of notifications by the Pakistani customs authorities in 2019 and 2021.
Exports from India to Pakistan stood at $513.82 million in the 2021-2022 fiscal, according to official statistics issued by the Ministry of Commerce and Industry.
Pakistan is also reportedly importing Indian goods via Dubai, which is the main reason why the UAE has emerged as one of the largest trading partners of Pakistan, while trading directly will prove to be cost-effective for Islamabad.
Earlier this year, in June, just as the government led by Prime Minister Shehbaz Sharif came to power, Pakistan Foreign Minister Bilawal Bhutto-Zardari hinted at resuming trading ties with India.
“Resumption of normal trade between India and Pakistan will be a slow and gradual process. But despite suspension of trade by Pakistan in 2019, India had been sending a whole range of items to that country based on the notifications issued by their customs,” said Nisha Taneja, professor, Indian Council for Research on International Economic Relations (ICRIER) and an expert on India-Pakistan trade.
She further said that India never restricted its exports to Pakistan, it only imposed a 200 per cent tariff on Pakistani imports after the Pulwama attack.
“Under the Shehbaz Sharif government there will be a push to resume normal trade. But for now, all they have to do is to have their customs issue a notification mentioning a list of items they need from India and it will be exported,” Taneja added.
(Edited by Poulomi Banerjee)
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