Pakistan-India Trade:

The Pakistan-India Trade Relationship: Prospects, Profits, and Pitfalls
Siachen and Sir Creek talks. It is unfortunate but true.” 9 A few weeks
later, Pakistan’s government announced that it could not conclude an
oil trade deal with India. The reason given was Pakistan’s insistence that
it not import more than 25 percent of its petroleum needs from India,
because of “security considerations.” 10
Moreover, despite the wealth of trade accomplishments in 2012,
the year drew to a troubling close. After Pakistan removed agricultural
goods from its negative list in November, farmers—a large component of
Pakistan’s labor force (about 40 percent of Pakistani jobs are agricultural)—
ominously threatened “to take matters into their own hands,” including
“physically blocking” agricultural imports from India. Meanwhile, India’s
economy continued to stumble toward year’s end, raising the prospect of
increased populist and protectionist sentiment in that nation.
Nonetheless, potential remains high. The two governments and
business groups continue to meet regularly, and officials frequently offer
reassurance—not to mention bold predictions. In November 2012, the
president of the Lahore Chamber of Commerce and Industry, speaking
at a meeting with visiting dignitaries from nearby Indian Punjab, projected
that bilateral trade would rise up to $5 billion in just a couple of
years—nearly double the current volume. 11
Ultimately, the trade normalization process will experience highs
and lows. Yet this volume’s contributors are emphatic that the reasons
for pushing forward on trade are compelling, with immense potential
payoffs for both sides—and beyond the region as well. As Mahmood, the
former Pakistani commerce secretary, writes in his essay: “Although the
[trade] process between the two countries is bilateral, the entire world
has a stake in peace in South Asia.”
* * *
This book and the conference that preceded it represent the ninth in
an ongoing Wilson Center series on critical economic challenges in
Pakistan. This project is very generously supported by the Fellowship
Fund for Pakistan (FFFP) in Karachi. We are deeply indebted to
Munawar Noorani, FFFP’s chairman, and to the other members of the
FFFP board of trustees and advisory council for their encouragement,
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