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News: Pakistan rejected the proposal to import sugar, cotton and cotton yarn from India. However, it still presents the chance of resumption of trade ties between Pakistan and India.

Present  status of trade between the two countries:

  • In 2019, after the Pulwama attack, India withdrew the Most Favoured Nation status from Pakistan  and imposed a custom duty hike of  200%. However, the exports were not banned.

  • And when India revoked the autonomy of Jammu and Kashmir, Pakistan suspended the trade, both imports and exports.

    • However, after a month it lifted a ban on import of medicines and raw material from India.

History of Indo-Pak trade ties:

  • Many times in their history both the countries have banned or suspended the bilateral trade, however the trade was resumed.

    • For example: Protocol on resumption of trade in 1974 after a gap of nine years following the India-Pakistan war in 1965. 

      • Under this protocol, a list of items, including essential agricultural commodities, which could stabilise domestic prices and take care of seasonal shortages and food security in the home country. 

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