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In the decade 1990-2000, Pakistan has had a trade surplus with India in only three of these ten years, importing far more than it exports. As can be seen from the tables above, most of Pakistan's exports to India have been in the 'food and related' category, rather than in raw materials, manufactured goods or intermediate products.
India's exports to Pakistan have been distributed among the categories 'agricultural and allied products', manufactured goods, and chemicals and related products.

Also interesting is the fact that India does not import any of Pakistan's major exports. Nor does Pakistan import any of India's major exports - as shown in the tables above. This is because of the competitive, rather than complementary, nature of the two economies and there is the 'general tendency' for developing countries to trade with developed ones. This explains the reasons why trade did not take place between the two countries, and that the real scope for trade and investment is in the future and begins now.

Bilateral Trade - Learning from History

History gives us many an example, why India and Pakistan should start propagating effective trade ties. Let's take a look at a few of them and how they can enlighten the Indo-Pak trade context.

• The countries in South America - Argentina, Brazil, Paraguay and Uruguay - had fought several wars and they continued to view one another with deep suspicion for a very long time. The birth of Mercosur helped change this mind set. In fact, the warming of relations between Argentina and Brazil, the area's two largest economies, ultimately led to both sides giving up their nuclear ambitions.

• The same can be said to be true for the North American Free Trade Area (NAFTA) that has brought Mexico closer to the United States and is likely to stay that way in spite of the uneven progress made by the trading arrangement during its first ten years.

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