Trading with India: some current
impediments for Pakistan
Rabia Manzoor,Abbas Murtaza Maken,Shujaat Ahmed Syed and
Department of Research, Sustainable Development Policy Institute,
Purpose –This study aims to examine the possible gains andchallenges for the enhancement of bilateral
trade ties between Indiaand Pakistan. It is interested speciﬁcally in analyzingand deliberating an attempt to
identifythe key challenges and bottlenecks in cross-border trade.
Design/methodology/approach –This paper offers in-depth case study of trade between India and
Pakistan using time-series data and through various stake holders' interviews. As further discussed in the
paper, the data investigationand interviews highlight impediments in India–Pakistantrade from trade policy
to other policiesinvolved in this process.
Findings –Based on time series data and stakeholders’interviews, the study concludes that poor trade
logistics and abysmal transport infrastructure, high tariffs and non-tariff measures, lengthy customary
procedures, heavy import duties, port restrictions, lack of appropriate storage facilities, strict visa regime,
ﬁnancial transaction barriersand lack of telecommunication facilities are the major challenges in the way of
Originality/value –The study proposessome key reforms and policy measures to boost the formal trade
to minimize the trade obstacles such as public–privatepartnerships and inclusion of private sector in a joint
trade commissionto strength the business relations between the two countries.
Keywords Investment, Non-tariff measures, Trade logistics, Transport infrastructure
Paper type Research paper
The current body of literature on regional trade in South Asia suggests that there is often
less trade among neighboring countries than there is with geographicallydistant countries
(Ahmed et al.,2014). Perhaps, this notion also applies to the trading relationship between
India and Pakistan. Even though both countries have relatively large economic size within
South Asia, they have a less than optimal levelof bilateral trade, which stands around 3 per
cent of the total trade volume. The volume of exchange as of 2010, stood at US$2.6bn –far
lower than the estimated trade potential of US$20bn(Taneja et al., 2016). Despite numerous
efforts to promote trade between India and Pakistan, there has not been tangible progress
(Batool and Ahmed, 2014).
Trade also takes place either through informal channels or personal baggage scheme
through the land borders or third countries via UAE, Singapore and Thailand. The actual
volume of informal trade is unknown, but there are different informed “guesstimates”of
informal trade betweenIndia and Pakistan (Ahmed et al.,2014).
Export categories may changeif tariff and non-tariff measures are lowered and informal
goods are allowed to gradually come through formal channels. Additionally, this will also
require addressing the complex, non-transparent or divergent regulatory requirements (e.g.
custom formalities, technicalregulations and sanitary standards) that markedly increase the
Received23 April 2018
Revised11 September 2018
Accepted3 October 2018
Journalof International Trade
Vol.18 No. 1, 2019
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