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Introduction

Any follower of Indo-Pak history knows that India and Pakistan have had a history wrought with difficulties and distrust, with the Kashmir issue alone having held the 1.5 billion people of India and Pakistan hostage, for as long as the two countries have been partitioned.
The worst fear, not just of residents of the two countries but of the troubled region and the world, is that irresponsible governments in both, or either country, could resort to extreme military measures against one another. As a result, trade between the two countries has been hit by decades of hostility centered on the dispute over Kashmir.

Since it is unlikely that the Kashmir issue is going to be resolved to anyone's liking in the near future, it is perhaps important to make headway in other arenas, which may eventually also have a positive impact on the impasse over Kashmir. The route towards better relations between India and Pakistan is open trade between the two countries. This paper argues that there is no economic rationale and justification for either of the two countries to not trade with each other, especially in an era of globalization, liberalization and the World Trade Organisation, of which both countries are members.

That Kashmir, the cause, has been relegated, as a secondary cause in the bureaucratic lexicon of both India and Pakistan would be too early to declare. But one can definitely assert that it no longer remains the only issue for consideration for bettering bilateral ties.

The paper looks at Bilateral Trade - a trade resolution affecting or undertaken by two parties for mutual development, as a solution to the Indo - Pak tension. It looks at

• where the trade stands today - the statistics,

• the learning from history on trade as a route to peace between nations,

• the benefits of Bilateral Trade to both the countries,

• the road map ahead - SAARC, Regional Trade Agreements, etc.

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* Contributed by -
Srinath Raj Kasi & Ashvin Vaidyanathan,
PGDIM - XI,
NITIE, Mumbai.