India-Pakistan trade has been reduced to a trickle with traders reluctant to travel across the border in view of the heightened tensions between the two countries and heavy security checks that goods are subjected to on both sides of the border.
According to senior railway officials, only one goods train per day is now travelling across the Attari- Wagah border, compared to a peak of four to five trains on certain days last year when heavy imports of cement were entering India. The average number of trains per day in 2009 works out to 2.7.
While there has been a drop in trade between the two countries following in the Mumbai blasts in November, 2008, the volume of trade had picked up in 2009.
However, with terrorists striking Pune in February this year followed by the Pakistan government's blame game after the Lahore and Peshawar explosions, there has been further escalation in tensions between the two countries.
"Since this leads to heavy checks for both exporters and goods, traders are reluctant to travel or ship goods," a senior railway official said.
Although a delegation of Pakistani women entrepreneurs visited Delhi on Friday and met their counterparts in the Federation of Indian Chambers of Commerce and Industry (Ficci), this is seen as more of a symbolic gesture as the situation at the ground level is not conducive to carrying out trade.
India had granted the ' most favoured nation' (MFN) status to Pakistan in 1998 to promote trade between the two countries.
However, Pakistan is yet to reciprocate the gesture. Pakistan allows only a limited number of Indian goods to be imported into the country.
Currently, official trade between India and Pakistan is about $ 2 billion per year but has gone up from a meagre $ 300 million in 2003- 04. Pakistan is still importing Indian goods through destinations in the Gulf, mainly Dubai. Singapore is another country through which Pakistani traders source Indian goods. The volume of these indirect Indian imports into Pakistan is estimated at some $ 2-3 billion a year.
This trade can be undertaken directly at a much lower cost through the Attari-Wagah border as the freight involved is a mere fraction of the circuitous Gulf route. There is also a huge loss in customs duties to the countries because of the circular route.
The Pakistan government has been reluctant to even allow the import of Indian generic drugs, which would drastically reduce the cost of healthcare for its citizens who are shelling out huge amounts for branded drugs of multinational firms.
Pakistan accounts for less than one per cent of India's trade and India accounts for under five per cent of Pakistan's trade. In 1948-49, as much as 70 per cent of Pakistan's trade was with India, while 63 per cent of Indian exports went to Pakistan.
Only one goods train per day is now travelling across the Attari- Wagah border compared to a peak of four to five trains on certain days last year.
Source : IndiaToday