INDIA PAKISTAN TRADE RELATION

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.

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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.

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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.