Trade between India and Pakistan remains miniscule and the suspension of trade relations is set to impact Pakistan more, especially in sectors like pharmaceuticals and chemicals, in which it relies heavily on India.
Following the Pahalgam terror attack, India had announced scaling down of diplomatic relations with Pakistan as well as suspension of the Indus Water Treaty. Following this, Pakistan has suspended all trade with India.
Experts highlight that bilateral trade between India and Pakistan has declined significantly in the last five years. While indirect trade routed through third countries, especially the Middle East still flourishes, the government is understood to be assessing how that can be curtailed, too.
As per official data, India’s exports to Pakistan fell 56.91% year-on-year between April 2024 and February 2025 to $491 million, while there were no imports. Compare this to India’s overall merchandise exports during FY25 of $437.42 billion. Top exports to Pakistan in FY25 included drug formulations, sugar, bulk drugs, residual chemicals and auto components.
India’s exports to Pakistan hit a peak of $2.06 billion in FY19 with imports of $495 million. Then in FY24, exports had picked up to $1.18 billion while imports amounted to $3 million. Imports from Pakistan usually include items like Ayush and herbal preparations, spices and fresh fruits.
“For Pakistan, imports from India, especially of pharma and chemicals are significant but constitute just a minor portion at 0.06% of India’s overall foreign trade,” pointed out Ajay Sahai, Director General and CEO, Federation of Indian Export Organisations (FIEO).
This is not the first time that trade has been curtailed. In the wake of the Pulwama terror attack in 2019, India had revoked the most favoured nation status to Pakistan. Pakistan had also suspended trade relations with India.
Recently, a report by the Global Trade Research Initiative had noted that India’s indirect exports to Pakistan are over $10 billion annually and are routed through ports like Dubai, Singapore, and Colombo to sidestep formal trade restrictions.
