India and Pakistan have never shared decent trade relations because of political uncertainty.
However, intermittently, there have been efforts aimed at improvement. For example, in 1996, India granted the Most Favoured Nation (MFN) status to Pakistan. But Pakistan did not do the same for India.
From 2006 till 2012, Pakistan carried a positive list, allowing 767 items to be imported from India to normalise the trade relations between the countries. It shifted its policy from the positive list to a negative list of 1209 items in March 2012. Additionally, Pakistan restricted road based trade by allowing only 137 items to be imported from India. According to international trade analysts, Pakistan has never had any serious intent of improving bilateral trade ties with India. The situation gets even more complicated when one takes into account the countless terrorist attacks organised by Pakistan backed terror outfits on Indian soil. The recent Pulwama terror attack in Jammu and Kashmir which closely follows the Uri attack is likely to worsen the trade relations between India and Pakistan.
A nominal scope for trade
Apart from the Chakan Da Bagh route in Poonch and the Salamabad route in Uri for trade between Jammu and Kashmir and Pakistan Occupied Kashmir (POK), India and Pakistan trade from two major routes, the Mumbai-Karachi sea route and the Attari-Wagah land route. Textiles used to hold the largest share of the two country’s bilateral trade till 2015-16. The scope of trade is limited as Pakistan allows only 138 items to be imported from India over the Attari-Wagah land route.
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