At a time Pakistan is reeling from a “monsoon on steroids”—with one-thirds of the country under water that has affected 33 million people—India must step up engagement, including extending humanitarian assistance to its neighbour. There is no reason why it can’t help Pakistan as it has helped Sri Lanka and Afghanistan. Pakistan is also desperately short of foreign exchange to import essentials and is seeking IMF assistance. No doubt, there are different voices within the Pakistan government on sourcing vegetables and food from India. Last year, too, these conflicting signals came in the way of importing sugar and cotton. As political tensions continue to cast a long and troubled shadow over bilateral cooperation, India has taken the position that the onus is on Pakistan for trade to resume. No decision has also been taken on sending aid. From India’s point of view, the neighbour’s sponsorship of cross-border terrorism stands in the way of any entente cordiale. Pakistan considers the restoration of the pre-August 5, 2019, status of Jammu and Kashmir as the core issue bedeviling bilateral relations. But these issues pale before the sheer scale of humanitarian disaster unfolding in Pakistan. The time to act is now. India must offer to rush food and other assistance immediately to Pakistan.
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Interestingly, bilateral frictions have not come in the way of trade. Islamabad has for long denied most-favoured-nation status to India’s goods. India, too, withdrew MFN status to Pakistan in February 2019 after the Pulwama terror attacks. MFN status ensures non-discriminatory trade between partner countries. Despite Islamabad’s ban on trade with India, it has almost doubled its imports during April-June this fiscal from India of sugar and sugar confectionery, organic chemicals and pharma products. There is no reason why India cannot significantly increase its imports from that country beyond items like dates. India’s trade with Pakistan dwindled to $516 million in FY22 while our two-way trade with Bangladesh is 35-times larger, at $18 billion. It is also a well-established fact that scale of informal trade is several multiples larger than formal trade. Clearly, there are interdependencies between India and Pakistan that must be seized on the trade front. Otherwise, there will be a huge loss in potential opportunities, contrary to economic theory which states that neighbouring countries often tend to trade more with each other.
India must reach out to its biggest neighbour in its hour of need. Perhaps the best occasion for doing so could be when prime minister Narendra Modi and his Pakistani counterpart Shehbaz Sharif meet on the sidelines of the Shanghai Cooperation Organisation summit at Samarkand, Uzbekistan in mid-September. PM Modi, for his part, has said that he was saddened by the devastation caused by the floods in Pakistan. PM Sharif in turn thanked PM Modi for his concern. When both leaders meet, India must go further than expressing commiseration. The uptick in Pakistan’s recent imports is a favourable augury for commerce to resume even if it is only food and vegetables for starters. Due to its bilateral problems with Pakistan, India has preferred regional groupings like the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation to the South Asian Association for Regional Cooperation. Unfortunately, the truth is that as the dominant power in the region, India cannot address the unfinished agenda of South Asian integration without engaging Pakistan.