Pakistan’s sweet deal with India could’ve helped consumers. But domestic politics came in way

Pakistan deferring sugar and cotton imports from India should be seen as parking the car by the side of the road rather than a full U-turn.

File photo of Pakistan PM Imran Khan | Facebook//ImranKhanOfficial/

The test flight of a trade kite lasted a mere day before jingoism pulled it down. The common refrain has been that enhancing trade between India and Pakistan will help handle the more difficult challenges that bedevil relations, but this time, ironically, trade followed the more contentious issues. Pakistan announcing the import of sugar and cotton — its two most important cash crops and India’s most politically influential crops — following a two-year gap came after the Line of Control ceasefire. 

The late February LoC ceasefire came out of the blue, and was obviously the result of some sophisticated back-channel communication and diplomacy between India and Pakistan. Not to mention the recent letters exchanged between PM Imran Khan and PM Narendra Modi that exuded uncharacteristically warm language. 

The positive announcement of sugar and cotton imports could have paved the way for further enhancement of India-Pakistan trade relations. Given that the initial ice-breaking covers possibly the most politically important crops in both countries, any success in handling the fallout is likely to help bring in other items into the trade basket. 

But India-Pakistan relations are always fraught with many imponderables, since they constitute essentially domestic rather than foreign policy issues. 

Not surprisingly, the Pakistan cabinet has now decided to defer the decision on importing from India less than 24 hours after the ECC had recommended easing of trade. What it was easing was, in fact, the plight of the Pakistani consumer, but that is, of course, of lesser importance than the atmospherics of holding India responsible for all ills. Consumption is slated to go up during the month of Ramadan, but with high prices, the burden on the consumer isn’t about to get lighter. The deferment should be taken more as parking the car by the side of the road rather than a full U-turn. The India-Pakistan forward motion of the recent past has, of course, slowed.

Why sugar and cotton matter

Pakistan’s newly appointed finance minister, Hammad Azhar, began his tenure with a politically significant proclamation of importing sugar and cotton yarn from India.

Pakistan’s Economic Coordination Council (ECC), as part of a slew of announcements, recommended the import of these two vital crops from India. Rising retail prices of sugar and shortfall in the cotton crop were the stated reasons for allowing the import from India. The initial announcement to reopen trade in ‘influential’ crops followed a series of bilateral announcements that have eased tensions between the two endlessly squabbling neighbours.

Pakistan would have imported 500,000 tonnes of white sugar from India to ease the extraordinarily high retail prices in the market. Consumers have been paying upwards of Pakistani Rs 110 for a kilo of sugar, a sharp jump from 2019-20 when it averaged a little less than Pakistani Rs 80. And with an annual average per capita consumption of about 25 kgs, Pakistan was staring at a sugar crisis. The import of cotton yarn was slated to begin at the end of June, by when the stocks of the previous crop would pretty much have been consumed. And were likely to last until the new crop is available by end of the kharif season.

While the import of sugar would have somewhat eased the situation for the consumer, the stated purpose of buying cotton from India was to help the small and medium exporters handle the shortfall in Pakistan’s cotton crop. Indian cotton mill owners, who have stocks of cotton yarn, would have expected a windfall as their six-month-old investment was likely to pay dividends from the end of June when the Pakistan import window opens. Textile exports are critical to Pakistan’s economy, so, coincidentally, trade in cotton can benefit merchants of both countries.

The fasting month of Ramadan begins in a matter of weeks, and with food inflation being an issue of deep concern, a positive move on critical consumer items would make eminent sense, economically and politically.

A two-front situation for both

Before the sugar and cotton imports were green-lighted, for a short while, Pakistan PM Imran Khan and his Chief of Army Staff Qamar Javed Bajwa had spoken positively about turning a new leaf in relations between the two countries.

Gen. Bajwa, as the key player in Pakistan, especially when it comes to relations with India, in the recent Islamabad Security Dialogue declared: “A nation at peace and a region in harmony are thus essential prerequisites for attainment of national security in the true spirit…I also firmly believe that no single nation in isolation, can perceive and further its quest for security…And finally, it is time that we in South Asia create synergy through connectivity, peaceful co-existence and resource sharing to fight hunger, illiteracy and disease instead of fighting each other.”

It is easy to dismiss the statement from Gen. Bajwa with a yawn and ‘heard it all before’ attitude. But that would not just belittle him, but also Indian interests. Since China began its Ladakh incursions in April 2020, India has looked at the very real spectre of a two-front situation involving neighbours to the east and west. Since the 1960s, it has haunted Indian security planners but 2020 was the closest it ever came to a two-front conflict. A very live, and bloody, daily exchange on the LoC coupled with China’s brutish behaviour in Ladakh was evidence if it was ever needed. So, getting out of a two-front situation is always in India’s interests, and coupled with a quiet LoC, it sets the stage for a normalised relationship with Pakistan. Islamabad/Rawalpindi too cannot accept its own two-front situation, with both India and Afghanistan sniping at it. Since there is no knowing which way Kabul will blow with its peace process, a sugary deal with India is always a good beginning to a hot summer.

The author is a Congress leader and Editor-in-Chief of Defence & Security Alert. Views are personal.

(Edited by Neera Majumdar)