In the wake of the Pulwama attack in Jammu & Kashmir against Indian paramilitary forces, the Indian government has withdrawn the Most Favoured Nation (MFN) status for Pakistan. This status had been accorded to Pakistan on the basis of India’s obligations under the World Trade Organisation. The former had, however, never reciprocated and it is only now that New Delhi has sought to respond in kind. [1]

While this is seen as a strong signal of sorts to the Pakistanis, it is unlikely to be so given the abysmally low level of Indo-Pak bilateral trade.

According to the UN Comtrade Database, Indo-Pak trade stood at US$1.992 billion in 2015, just about crossed the US$2 billion threshold in 2016 and in 2017 had not increased by more than a few tens of millions of dollars over the previous year. Pakistani exports to India in this period stayed between US$310 million and US$350 million. By contrast, Sino-Pak trade in 2015 stood at nearly US$13 billion with Pakistan suffering a deficit of some US$11 billion. In 2016, trade went up to US$15.3 billion with not just Pakistani imports rising but its exports to China also falling worsening its deficit. This trend continued even as Sino-Pak trade rose to nearly US$17 billion with Pakistani exports to China constituting just a shade over US$1.5 billion.[2] Continue reading →