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Indo–Pak trade may fall 60% to $900 mn in 2009-10, says FICCI

09 Mar '09
4 min read

The present state of economic relations between India and Pakistan finds a parallel with the situation that prevailed during the Kargil war in 1999. Even during those days, it was seen that cross border travel and business movement was a major casualty following the freezing of relations between the two South Asian countries. In fact, trade volumes had declined significantly during that period from US$ 318 million in 1998-99 to US$ 161.02 million in 1999-00.

While a major decline in trade volume between the two sides during the coming months is now a certainty, there are a few areas where exchange may continue though at a slower pace. Notable items in this list include leather and cement.

Participants from the leather industry have said that leather sourced from Pakistan is of excellent quality and is very competitively priced. Leather sourced from other countries cannot match the same quality and pricing as offered by sources from Pakistan. As an example one can consider the case of cow-finished leather, which if sourced from Pakistan costs 5-10 cents per square foot as compared to 50-80 cents per square foot if sourced from European countries.

Similarly, in case of cement, we again see companies reporting not much impact on imports from Pakistan. According to survey participants, demand for cement in India is still growing at a good pace and Pakistan with its surplus capacity in cement production is in a good position to cater to this rising Indian demand at very competitive prices.

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Federation of Indian Chambers of Commerce and Industry

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