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While about 4.5 per cent of India's total exports are directed to South Asia, the figure is 3 per cent in the case of Pakistan. Exports to Pakistan constitute about 8 per cent of India's total exports to South Asia. Pakistan's exports to India have a higher average share of about 40 per cent, during 1998-2000, of Pakistan's total exports to South Asia compared with an average share of about 17 per cent during 1995-1997.

In the case of imports, 0.8 per cent of India's imports originate from South Asia and the figure is 0.5 per cent for Pakistan. Within India's imports from South Asia, 36 per cent originate from Pakistan. Pakistan sources 69 per cent of its total South Asian imports from India. Clearly, India and Pakistan are two major trading partners among the South Asian countries despite all hurdles.

However, there is no formal India-Pakistan trade agreement and Pakistan allows only a handful of commodities to be imported from India, which have, nevertheless, increased over the years. In 1996, 615 items were permissible for trade, although 90 per cent of the trade took place in only 42 items; in April 2003, following the peace initiative by the Indian Prime Minister, the Pakistani Prime Minister increased the number of tradable items.

Table 2: Pakistan's Total Trade + Trade with India 1992-2002 (in US$ million)

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