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No Talks on Trade Between India and Pakistan: A Frozen Relationship

4 minutes read

No Talks on Trade Between India and Pakistan: A Frozen Relationship

4 minutes read

Indian Foreign Minister Dr. Subrahmanyam Jaishankar reiterated India’s firm stance on trade relations with Pakistan, stating that there have been no discussions or initiatives to resume commerce between the two nations. Speaking at a press conference at the Indian Embassy in Washington, Jaishankar addressed the issue while also underscoring India’s broader foreign policy priorities. His comments highlight the deadlock between the two neighbors, whose relations remain strained due to longstanding political and territorial disputes.

India’s Position on Trade

Jaishankar made it clear that India did not cease trade with Pakistan but that the decision to suspend commerce was unilaterally taken by Islamabad in 2019. “We never stopped trade,” he asserted, adding, “The decision to halt trading was theirs.” The minister further highlighted India’s frustration over Pakistan’s failure to reciprocate the Most Favoured Nation (MFN) status, which India had granted to Pakistan under World Trade Organization rules.

“From the very beginning, our interest was to ensure reciprocal treatment under the MFN framework,” Jaishankar said. “We extended this status to Pakistan, but they did not grant the same to us, which has always been a concern.” Despite these challenges, Jaishankar noted that no recent proposals or dialogues have taken place between the two nations to revive trade relations.

The 2019 Break in Relations

The trade suspension between India and Pakistan occurred in August 2019, following India’s controversial decision to revoke Article 370 of its constitution, which had granted special autonomy to Indian-administered Kashmir. In retaliation, Pakistan downgraded diplomatic ties with India, expelled the Indian high commissioner, and suspended bilateral trade.

The events of 2019 significantly deepened the rift between the two countries. For Pakistan, the revocation of Kashmir’s special status was seen as a violation of international norms and commitments. India, on the other hand, maintained that the move was an internal matter aimed at integrating the region more fully into the Indian union. The fallout has kept diplomatic channels largely closed, with no meaningful engagement to resolve the impasse.

Pakistan’s Perspective

Pakistan’s Foreign Office (FO) has consistently maintained that the resumption of trade with India is not feasible under the current circumstances. In August last year, then-FO spokesperson Mumtaz Zahra Baloch categorically stated, “The situation remains unchanged since the events of 2019. At this point, there are no bilateral talks between the two countries with respect to trade.”

Pakistan’s government under former Prime Minister Imran Khan had strongly opposed any normalization of relations with India following the Kashmir decision. While some voices within Pakistan’s business community and political circles have called for a pragmatic approach to trade, citing economic pressures, these views have not translated into policy shifts.

Missed Opportunities for Engagement

There have been moments when trade normalization appeared to be on the table, albeit briefly. For instance, in March 2021, Pakistan’s Economic Coordination Committee announced a decision to allow the private sector to import 0.5 million tonnes of white sugar and cotton from India via the Wagah border. However, the decision faced severe backlash from opposition parties and was reversed within days.

Similarly, in March 2024, Pakistani Finance Minister Ishaq Dar stated that stakeholders would “seriously examine” the trade situation with India, hinting at the possibility of reopening certain avenues. However, no concrete steps were taken, and the broader geopolitical context overshadowed these fleeting moments of potential engagement.

India’s Broader Foreign Policy Priorities

While addressing trade issues with Pakistan, Jaishankar also highlighted the strength of India’s relationship with the United States. He underscored the trust and convergence of interests between the two nations, describing the India-U.S. partnership as one based on mutual respect and shared global objectives. “We have a very strong degree of trust today between India and the United States, a very high level of convergence of our interests,” Jaishankar remarked.

India’s strategic focus on building alliances with global powers like the U.S. and strengthening its position in multilateral forums reflects its intention to prioritize broader geopolitical goals over bilateral issues with Pakistan. Jaishankar’s statements in Washington serve as a reminder that India’s foreign policy agenda is increasingly global in scope, leaving little room for rapprochement with its western neighbor.

The Road Ahead

The trade relationship between India and Pakistan remains frozen, with little indication of progress in the near future. The absence of dialogue, coupled with deeply entrenched political and territorial disputes, has created a seemingly insurmountable impasse. While there are occasional calls for pragmatic engagement, particularly from business communities on both sides, these voices are often drowned out by the larger geopolitical narrative.

For now, the situation remains one of mutual distrust and missed opportunities. Unless significant shifts occur in the political dynamics of the region, the prospects for normalizing trade relations between India and Pakistan appear bleak. Both nations seem focused on their respective priorities, with little appetite for compromise or reconciliation.

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