India-Pakistan Bi-Lateral Trade
The formal trade between India and Pakistan has increased from USD 250 million in FY 2003 to USD 2.4 billion in FY 2013 with a compounded annual growth rate of 25 percent in the last 10 years. The bilateral trade balance at present is heavily in favour of India with exports pegged at USD 1.84 billion and imports at USD 0.51 billion in FY 2013. Exports have increased by 19% percent in FY 2013. Similarly Imports from Pakistan have increased by 27%. Experts have quoted that the potential trade between the nation ranges from USD 5 billon to USD 42 billion.
INDO PAK TRADE A WIN WIN SITUATION:
Enhancing trade relations between India and Pakistan would ensure cheaper raw materials and low transportation and insurance cost which would translate into quality goods at competitive prices for both the countries. While consumers would gain in terms of lower prices, higher purchasing power and greater choice of traded goods; manufacturers will have access to the wider markets in the neighbourhood. The Government would have revenue gains by bringing informal trade into the formal channel. Ultimately, this would result in a win-win situation for everyone.
The India-Pakistan trade will open two other tantalizing possibilities.
1. Greater trade facilitation in South Asia, production networks will now be established in the region bringing down costs, generating employment and expanding regional trade.
2. Connecting South Asia to Central Asia and marking the beginning of a new Silk Route.